Democratic Republic of Congo

The Lord Bishop of Winchester: asked Her Majesty's Government:
	Whether they opposed the discontinuance by the United Nations Human Rights Council of the mandate for an expert on the Democratic Republic of Congo.

Lord Malloch-Brown: My Lords, Her Majesty's Government strongly advocated the renewal of the mandate of the UN independent expert on human rights in the Democratic Republic of Congo. We made this clear through UK and EU statements during discussions at the Human Rights Council, but the HRC could not agree to this. However, there was agreement that existing special rapporteurs will present a report on the human rights situation in DRC by the HRC's March 2009 session.

The Lord Bishop of Winchester: My Lords, I am grateful to the Minister for his response, especially for that assurance, because the situation in the Congo is dire, not only in the east following the stalemate after the Goma ceasefire but also in the west and the south-west in Kinshasa. Does not this failure give those states responsible for serious human rights violations a veto on the council's ability to fulfil its mandate? At the meeting of the contact group to be held next week, will the UK join others in pressing for the appointment of an additional senior special adviser on human rights to monitor the human rights obligations of the Goma agreement?

Lord Malloch-Brown: My Lords, let me assure the right reverend Prelate that, on his first question, we hope that this will not be the case. Other countries that have resisted a special rapporteur have nevertheless had one imposed on them by the council, so we hope very much that the principle about which he is concerned is not conceded. Moreover, the special rapporteurs on violence against women and the independence of the judiciary have produced excellent reports on the situation in DRC, particularly in the east, so we think that the framework of strong reporting remains intact. I shall certainly look into the Goma issue.

Lord Alton of Liverpool: My Lords, does the Minister accept that the killings in Goma, Kivu and, indeed, throughout the rest of the Congo, where more than 3 million people have died in the last decade or so, have been driven on by the insatiable desire of the Congo's neighbours and factions inside the country to seize and plunder the massive mineral resources there? Does he agree that, in developing human rights over the long term, one of the most important things to do is to join with the mining interests and big mining companies to ensure that they exploit those mineral resources to the benefit of the people of the Congo and thus help to build a civil society there?

Lord Malloch-Brown: My Lords, the noble Lord puts his finger on one of the most critical issues that has kept the Congo in conflict. The mining interests have over many years taken different sides in the factional fighting in the country. Now that there is a democratically elected Government for the DRC, we hope that they can regularise their relations with the mining industry, put them on a much more transparent footing and break the curse that these resources have previously placed on the country's development.

Lord Avebury: My Lords, there are continuing reports of atrocities in the eastern DRC, with a particularly horrific report this morning by a Congolese doctor on the use of mass rape as an instrument of conflict by the 23 armed groups. In the circumstances, is it not essential that there should be an effective monitoring mechanism for Article 3 of the Goma agreement of 23 January, which compels these groups to abide by humanitarian and human rights law? Therefore, can the Government undertake to press at the contact group meeting next week for the proposal mentioned by the right reverend Prelate, which has the approval not only of the 63 Congolese human rights NGOs but also that of several countries?

Lord Malloch-Brown: My Lords, the noble Lord and the right reverend Prelate make it clear that we need to ensure that our people on the ground have instructions to press hard for this proposal. I know not only from President Kabila but also from discussions with the UN special representative and others that there is a common understanding that human rights in the eastern Congo are the single most important threat for the democratic stabilisation of that country. There is a common desire to address this and we will certainly look into using the Goma process, and Article 3, as a means of doing that.

Lord Davies of Coity: My Lords, I agree with my noble friend and understand the circumstances in the Congo. With a democratically elected Government, it is possible that the human rights relationship might well be established. However, does he not feel that, in Africa, Britain should be doing more about the human rights situation in Zimbabwe?

Lord Malloch-Brown: My Lords, certainly the world should be doing more about the human rights situation in Zimbabwe, which is bad and getting worse. However, dreadful though it is, there is a bigger level of abuse in the Congo—or, for that matter, in Darfur—than in Zimbabwe. That in no way excuses the situation in Zimbabwe. We should be pressing hard for good human rights protection in all these situations.

Disability: Winter Fuel Payments

Lord Ashley of Stoke: asked Her Majesty's Government:
	When they will extend winter fuel payments to disabled people who require additional heating in order to manage their impairment.

Lord McKenzie of Luton: My Lords, we have no plans to extend winter fuel payments to disabled people aged under-60. Help is already available through disability benefits and the disability premium in income-related benefits in recognition of the extra costs, including heating, which disabled people may have.

Lord Ashley of Stoke: My Lords, I thank my noble friend for that reply. Is he aware that the Government cannot lose on this issue because they are fighting disabled people who are not able to fight for themselves? It is a very easy victory for the Government. On the other hand, the Government cannot win in this situation because when they refuse payments to disabled people that is noted, not only by disabled people, but also by the general public. The public tend to judge disabled people's reactions and are disconcerted by what is happening. Does my noble friend agree that the best thing now is for the Government to change their tack and make certain that the allowance is given to disabled people—because without it, they are suffering quite considerably?

Lord McKenzie of Luton: My Lords, I acknowledge my noble friend's disappointment with my reply, but the winter fuel payments were created to reassure pensioners that they could afford to heat their homes in winter. That is why they have been targeted. He will know that 60 per cent of those receiving DLA or attendance allowance are aged 60 or over and automatically receive winter fuel payments in any event. Notwithstanding the rising cost of energy, which has presented a real challenge, a severely disabled person can get more than £150 per week extra in benefit, including the disability premium and income support. We are concerned about the impact of high fuel prices on vulnerable people and have been encouraging energy suppliers to adopt initiatives to reduce the impact of price rises on the most vulnerable.

Baroness Gardner of Parkes: My Lords, I declare an interest, having a daughter in her 40s who is in receipt of the higher rate disability living allowance. She tells me that if you are disabled and trying to live independently you need warmth more than if you are a non-disabled person. I have put this point to the Minister before and he said he would consider it, but now I gather that the answer is no. Will he tell me more about how easy it is to get help?

Lord McKenzie of Luton: My Lords, as I said a moment ago, the disability benefits and DLA were created to ensure that the additional costs that disabled people inevitably face can be supported and that the money can be spent as they feel most appropriate. Regarding the additional support, as I said, we have been working with the energy companies to encourage them to put more resources into vulnerable households. There are challenges about information flows to enable appropriate targeting, and we hope that there will be some developments on that shortly.
	Individuals on income support or jobseeker's allowance who have a disability premium or a disabled child can get cold weather payments when the weather turns particularly cold. Furthermore, 48 per cent of disabled people of working age are in work, and part of the Government's strategy to help people out of poverty, including fuel poverty, is to support people to get into employment and to ensure that work pays.

Lord Addington: My Lords, does the Minister agree that we have had this discussion several times and that it always comes down to the fact that there is a small group of the disabled who have difficulty generating sufficient heat within their own bodies but are not taken as part of the mainstream of disability benefits? Surely the Government should take another look to see whether they can address that problem.

Lord McKenzie of Luton: My Lords, I have tried to deal with the points raised. The proposition was that we should target winter fuel payments to disabled people and I have explained why, in our view, that is not an appropriate basis for targeting that resource. Warm Front, which the Government are supporting, has, through energy-efficiency measures, helped more than 1.6 million households benefit from advice and the installation of central heating. People in receipt of qualifying disability benefits can be eligible for grants of up to £2,700, or £4,000 where oil heating is recommended. We spent £2 billion on winter fuel payments in 2007-8 and, since 2000, £20 billion has been spent on fuel poverty benefits and programmes to tackle fuel poverty.

Lord Jenkin of Roding: My Lords, were the needs of the disabled considered at the recent fuel poor summit? As that important conference was aimed mainly at what the fuel industries could do to help the fuel poor, when will the Government be able to announce their arrangements for ensuring that the companies know who they really have to help?

Lord McKenzie of Luton: My Lords, the summit covered a range of issues but focused on working with the industries to encourage them to do more. We said in Budget 2008 that we would like to see the amount that energy suppliers spend on social programmes increase to at least £150 million and I think that six major energy suppliers have signed up to that. As the noble Lord has indicated, there are issues about providing information to support identification of vulnerable households. That is not without its difficulties, because of data protection and other sorts of issues, but it is being actively addressed and we hope to be able to move forward on that quite soon.

Lord Palmer: My Lords, does the Minister not agree that it is a scandal that, in this day and age, anybody is living in fuel poverty?

Lord McKenzie of Luton: My Lords, we do not want to see anybody living in poverty, fuel poverty or otherwise. This Government have done a good deal to make sure that people have been removed from child poverty, pensioner poverty and fuel poverty. It is undoubtedly a continuing challenge, particularly with the current fuel increases. However, just in the Budget last year a further £50 in winter fuel payments was announced for people aged between 60 and 79, and £100 for people aged 80 and over. Those were increases of 25 and 33 per cent respectively, which is one way of helping people in poverty. It is a constant challenge, but I believe that we, as a Government, have a good record in tackling poverty right across the piece.

Lord Forsyth of Drumlean: My Lords, would not one way of helping people who find meeting energy costs difficult be to reduce the taxes that the Government have increased on fuel? For example, around 8 per cent of the average electricity bill consists of the renewables obligation; there are also the increased taxes on oil that have been allowed. Given energy costs, would the Government not like to review the tax regimes in order to reduce the real cost to people of paying to heat their homes?

Lord McKenzie of Luton: My Lords, it is all very well to propose reductions in taxes here, there and everywhere, but the noble Lord has to say where additional taxation would come from to replace that lost revenue or what programmes would be cut to make sure that the budget can be sustained.

Lord Skelmersdale: My Lords, the Minister said that the Government have no plans to accede to the wish of the noble Lord, Lord Ashley of Stoke. Does that mean that no policy work whatever is going on in the department?

Lord McKenzie of Luton: No, my Lords, of course it does not. The noble Lord is well aware that a whole range of policy initiatives is going on, right across the DWP's responsibilities, and that we have had four pieces of legislation in the past 18 months. There are lots of policy developments, focused particularly on poverty—child poverty, fuel poverty and pensioner poverty—to make sure that the Government can sustain their good record.

Royal Navy: Piracy

Earl Attlee: asked Her Majesty's Government:
	What guidance the Foreign and Commonwealth Office provides to the Royal Navy on intervening in cases of suspected piracy in international waters.

Baroness Taylor of Bolton: My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the family and friends of Trooper Ratu Babakobau, who was killed on Friday, 2 May in Afghanistan.
	As for the Question, the Foreign and Commonwealth Office does not provide advice to the Royal Navy. The Ministry of Defence provides classified policy advice to the Royal Navy, which in turn provides detailed classified policy and legal guidance to its commanding officers to enable them to fulfil the United Kingdom's obligations under international law including, in particular, the United Nations Convention on the Law of the Sea.

Earl Attlee: My Lords, I thank the Minister for her reply. The pirates off the coast of Somalia are becoming ever bolder, frequently attacking in excess of 100 miles out from the coast. They certainly do not come from Penzance; they are very nasty people indeed. When the Royal Navy captures some of them, how will they be dealt with and brought to justice? Who has jurisdiction, and where will they be tried?

Baroness Taylor of Bolton: My Lords, the noble Earl is right to say that incidents of piracy in that part of the world have increased. Although such incidents have fortunately decreased in other parts of the world, they are becoming a more difficult problem on the coast of Africa that he mentioned. The Royal Navy has an obligation under international law to help if it is in a position to offer assistance. If it is in the vicinity, it has powers of capture, should that be appropriate, under the United Nations Convention on the Law of the Sea.
	Should people be apprehended and taken into custody by the Royal Navy—this has not happened so far—they would remain in United Kingdom custody until any ship of ours entered territorial waters, but before that happened we would talk to any of the nations that might be involved. As it is very rare for an instance of piracy to involve nationals from only one nation, you have to take into account the ownership of the ship, the personnel on board and the territory into which they may be going. If people involved in piracy were brought back to this country, they would be subject to the British criminal justice system.

Lord Lee of Trafford: My Lords, I should like to enjoin these Benches in the Minister's earlier tribute.
	The British Chamber of Shipping's annual review states:
	"The Chamber recognises that the impact of any transient show of marine force is limited and that permanent solutions to the piracy problem in both Somalia and Nigeria can come only from land based action that denies pirates their safe havens and operating bases".
	To this end are Her Majesty's Government having discussions with the Somalian Government on allowing hot pursuit or similar on their territory?

Baroness Taylor of Bolton: My Lords, what the noble Lord says is absolutely true. We have a problem in this area because of the ineffectiveness of the domestic Government in Somalia and their inability to tackle this problem. This concerns us and the United Nations. There have been two resolutions in the United Nations within the past year and discussions are under way about a possible further resolution which would affect Somalia in particular. We are trying to assist Somalia, both individually and collectively with our allies, so that it can provide more protection. It is not an easy task but is one that we take very seriously.

Lord Elystan-Morgan: My Lords, does the noble Baroness accept that under both the law of nations and the Merchant Shipping Acts an act of piracy is a crime at international law and therefore triable in the courts of England and Wales wherever it has occurred? Can she tell the House when the last prosecution occurred and whether any prosecutions are either contemplated or in train?

Baroness Taylor of Bolton: My Lords, I have no knowledge of any prosecutions. As I said, the Royal Navy has not been involved in apprehending and arresting anybody for piracy, so it has not yet brought anybody back to this country. By definition, that means that no cases are pending.

Lord King of Bridgwater: My Lords, is the noble Baroness aware that the acts of piracy off the coast of Somalia are clearly becoming extremely serious and spreading to other regions as well? The recent publicity about the instructions to the Royal Navy has caused considerable concern. Can she explain how it is possible for the French navy to operate much more robustly than seems to be permitted to the Royal Navy?

Baroness Taylor of Bolton: My Lords, as I said, all these cases are individual and different and the situation is therefore very complex. I think that it would be inappropriate for me to comment on the operations of another state. As I said, very often not just one country is involved because a ship may belong to one country but individuals and the crew may come from another.
	All countries have the same powers. We take the view that we have to be extremely cautious in what we do in these circumstances but that we should take any action we can to protect people, and indeed we have an obligation to do so. As for the French boat—I presume that the noble Lord means "Le Ponant"—I understand that the French took action in conjunction with the Government of Somalia after agreeing on the action thought necessary in that case. Fortunately, we have not had a similar case involving a British boat. As for the figures, piracy is not increasing worldwide. Other areas are not following Somalia in that regard.

Lord Astor of Hever: My Lords, from these Benches we also send our condolences to the wife and two young sons of Trooper Babakobau of the Life Guards.
	Following on from my noble friend Lord King's question, will the Government join France in lobbying the UN Security Council to adopt an international piracy law?

Baroness Taylor of Bolton: My Lords, the United Kingdom, along with France, Panama and the United States, is already co-sponsoring a proposal at the United Nations for a further resolution on the matter. It is already in hand.

Burma: Cyclone Nargis

Baroness Northover: asked Her Majesty's Government:
	What short-term and long-term aid they plan to give Burma following Cyclone Nargis.

Baroness Crawley: My Lords, the UK has pledged an initial contribution of £5 million for the immediate relief effort. This includes financial assistance channelled through the UN, the Red Cross and NGOs and air-lifting emergency supplies such as tents, water containers, blankets and plastic sheets. We will make further decisions as more detailed assessments on need come in. A DfID team of emergency response experts arrived in Burma last weekend.

Baroness Northover: My Lords, I thank the noble Baroness for that reply. Can any action be taken through the UN in terms of its duty to protect, or is that seen as counterproductive? Is the Minister satisfied that the first plane with aid from the UK is, as I understand it, leaving only today? Is there not more that can be done to channel aid through the NGOs, which are already working quietly and effectively in the field, to prevent what is at the moment a natural disaster becoming a public health catastrophe?

Baroness Crawley: My Lords, I agree with the noble Baroness that it is our priority to prevent a tragedy becoming a total catastrophe. As chair of the UN Security Council, we have made a number of suggestions but the response from China, Russia and other countries, including the ASEAN countries, is that it would be counterproductive at present to raise the duty to protect; we have not had a positive response to that.
	With regards to DfID's flights, we are pleased to say that we have got a flight in. As the noble Baroness said, it departed from Dubai for Burma today, where we have stockpiled tents, water containers, blankets and plastic sheets. We also have, we hope, two more scheduled flights—and more to follow in the coming week—and a DfID logistics expert at Rangoon airport working with the world food programme to try to co-ordinate getting the aid out of the airport. DfID is also flying in low loaders—one of the problems is that the aid cannot be got off some of the planes because there is not equipment there to do that—and flat-bottomed boats.

Baroness Billingham: My Lords, does the Minister agree that, with this issue, not a moment should be wasted? Is she also aware that, as of today, Save the Children Fund has reached 100,000 people because it is already working in the five worst-affected areas? Given that fact, if we have a delivery agency on our doorstep, it would seem sensible that all Government moneys that are going to be channelled into that area—we have been not very successful with that so far—ought to be given to Save the Children and organisations of a similar ilk.

Baroness Crawley: My Lords, I agree with my noble friend that we are witnessing the worst humanitarian disaster since the Asian tsunami of 2004. She referred to Save the Children; we are working through NGOs such as Save the Children, World Vision, Merlin, CARE International, Action Against Hunger, Christian Aid, Concern, Muslim Aid, Oxfam and Population Services International. We are working through the Red Cross, the UN and the NGOs; that co-ordination is essential because, as my noble friend says, they are there on the ground.

Baroness Williams of Crosby: My Lords, the Minister's words are very encouraging indeed but can she comment on the troubling reports in newspapers ranging from those in India to those in our own country that state that in some cases the Burmese junta has diverted aid to its own barracks and in some cases it has sold the aid on the free market? The price of rice has increased by 30 per cent in Burma in the past couple of months. Are the representations that are being made by Her Majesty's Government and other Governments to allow visas for professionally qualified aid workers to get in and to distribute aid, bypassing the Burmese army, reaching a satisfactory conclusion?

Baroness Crawley: My Lords, the issue of visas is extremely patchy. There is some improvement and more advisors and aid specialists are getting in, but not nearly enough. As we know, time is of the essence. There has been some improvement, but not nearly enough. The noble Baroness raised the issue of the purloining of aid by the Burmese regime; because it is such a closed regime it is very difficult to know, except for anecdotal evidence, exactly what is happening. All that we can do is ensure that none of our aid goes to the Government.

The Lord Bishop of Liverpool: My Lords, I declare an interest as a vice-president of Tear Fund, which is already in Burma working with local partners. Further to the answer that the noble Baroness gave, will the DfID team be directed to work specifically with the local civil society groups and the Buddhist and Christian groups that are already working in the cyclone area?

Baroness Crawley: My Lords, we will work with all NGOs and faith groups that are working in the worst-affected areas. We are trying to co-ordinate from our DfID office in Rangoon but we are working as closely as possible with everyone in the field.

Baroness O'Cathain: My Lords, has the Minister taken on board what the noble Baroness, Lady Billingham, said; namely, that the Government should try to work with NGOs that are long established there? She reeled off a list of wonderfully worthy NGOs. Are they actually established in Burma? Will she take to heart the suggestion about Save the Children and let us know?

Baroness Crawley: My Lords, several of the NGOs that I "reeled off", as the noble Baroness said, are established in Burma, such as Save the Children, CARE International and World Vision. They have been in Burma for some time. As the noble Baroness has intimated, it is absolutely right for us to work with them as closely as possible, because they have some distribution networks. We must work with them, and we will obviously try to get as many people in as possible. They in turn are working with their local helpers.

Business

Baroness Royall of Blaisdon: My Lords, with the permission of the House, my noble friend Lord Davies will repeat a Statement entitled "Income Tax" at a convenient time after 3.30 pm.

Marine Bill (Draft)

Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the Commons message of 8May be considered and that a committee of eleven Lords members be appointed to join with the committee appointed by the Commons to consider and report on the draft Marine Bill presented to both Houses on 3 April (Cm 7351) and that the committee should report on the draft Bill by 22 July 2008;
	That, as proposed by the Committee of Selection, the following members be appointed to the committee:
	B Byford
	E CaithnessL GreavesL GreenwayL HaworthL Hunt of ChestertonB Jones of WhitchurchL Lewis of NewnhamL MacKenzie of CulkeinB Miller of Chilthorne DomerE Selborne;
	That the committee have power to agree with the committee appointed by the Commons in the appointment of a chairman;
	That the committee have power to appoint specialist advisers;
	That the committee have power to adjourn from place to place within the United Kingdom;
	That the committee have leave to report from time to time;
	That the reports of the committee from time to time shall be printed, regardless of any adjournment of the House;
	That the evidence taken by the committee shall, if the committee so wishes, be published; and
	That the committee meet with the committee appointed by the Commons tomorrow at 10 am in the Boothroyd Room, Portcullis House.—(The Chairman of Committees.)

On Question, Motion agreed to.

St. Austell Market Bill [HL]

Read a second time, and committed to an Unopposed Bill Committee.

Channel Tunnel Rail Link (Supplementary Provisions) Bill

Read a third time.

Lord Bradshaw: moved Amendment No. 1:
	Before Clause 1, insert the following new Clause—
	"Repeal of sections 16, 17 and 21 of the 1996 Act
	Sections 16 (licensing), 17 (access agreements) and 21 (duties as to exercise of regulatory functions) of the 1996 Act are repealed."

Lord Bradshaw: My Lords, when this Bill was introduced, it contained several very unsatisfactory features. These included the independent regulation of the operator and of those maintaining the infrastructure. By independent regulation, I do not mean regulation by Government. We were also concerned that there should be open access for any operator, particularly continental and freight, and that this would be accorded to them on a non-discriminatory basis.
	In the past couple of days, the noble Lord, Lord Berkeley, and I have held meetings and discussions with officials and we hope that the Minister will now be able to give the House the reassurances that we have sought. We hope to see the Channel Tunnel rail link and Eurostar, after they have been sold off to defray taxpayers' investment, brought as soon as possible within the scope of the Office of Rail Regulation, which has accumulated a great deal of specialist knowledge on which to base judgments about the efficiency with which the track is maintained. By "efficiency", I mean how efficient Network Rail—which is the contracted maintenance partner of the Channel Tunnel rail link company—is in doing its job. We hope that its pursuit of efficiency will extend to those services. We also hope that the development agreement referred to in the Channel Tunnel Rail Link Act 1996 will be superseded by the concession agreement into which the Government, if this Bill passes, are about to enter. I beg to move.

Lord Berkeley: My Lords, my name appears on the two amendments tabled today. I, too, have had meetings with the Minister for Railways, Tom Harris, and officials. In the past 24 hours, we have made a great deal of progress. The first concern that prompted this amendment was that the Channel Tunnel rail link would be different from the rest of the network and that access to it for passengers and freight—I declare an interest as chairman of Rail Freight Group, although I do not think that freight is of particular interest here—could have been skewed in favour of one particular operator. The second concern was about the level of charges and who would set them. There is the charge applicable for maintaining the track, and then there is the cap, which is the extra charge that can be put on to help defray the capital cost, which the Government have guaranteed. I hope that my noble friend will be able to give me assurances on both these issues.
	The first one is the cost of maintenance. Allowing the new infrastructure manager to maintain the track, without any form of regulation, is a dangerous path to go down. Railtrack was regulated and it failed. The Office of Rail Regulation has had to put strong pressure on Network Rail to cut its costs by 31 per cent in the past five years, and the regulator will probably have to do much the same in the next five years. To say that these companies would reduce their costs just because of market pressure, without any regulation, is a dangerous road to go down. I hope that my noble friend can give me some comfort on that.
	The second issue is the cap that is allowed to help defray the capital cost. Those who invest in the rolling stock and, maybe, the terminals to operate on this line will need some comfort that the cap will not be changed every year. The Government may wish to retain control of setting this cap effectively, but, for example, there may be a change of Government in two years' time—which is highly unlikely, but one has to look at options. The incoming Government might think that the Channel Tunnel rail link was a waste of time and they might have severe financial crises on their hands, such that they would have to increase the charges. That would not be very good for the companies which invested in new rolling stock to run on this line on the basis of the comfort that they had from the initial charge level.
	The level of charges as regards both issues should be set by the Office of Rail Regulation. However, if the Government insist upon keeping control of the cap element, I hope that my noble friend can give me some comfort that the cap cannot be changed suddenly by another Government or a change of policy of a particular Government, on a whim, which would destroy investor confidence.
	Finally, there is the question of access. We all hope that the line will be extremely successful in encouraging many more passengers to use not only Eurostar, but, I hope, new services that will come here. Whether those are run by French railways, SNCF, by Deutche Bahn, the German railways, or by a UK company which buys new trains to run on the line, it is important that there is sufficient capacity and that it is reserved not only for Eurostar because it was there first. The open access regime should be managed independently, I hope by the Office of Rail Regulation, to give everyone a fair chance to run trains in competition—which is I am sure what the Government want.
	I thank officials and Ministers for all the time that they have spent discussing this. I very much hope that my noble friend will be able to give me some comfort and that, finally, we can reach an acceptable compromise.

Lord Hanningfield: My Lords, I have put my name to this amendment. I know that although this is a short Bill, it has provoked some interesting discussions. We have all had the interests of rail users and taxpayers at heart in the debates on amendments that have been tabled. As everyone knows, I have always had a lot of sympathy with the points made by the noble Lord, Lord Bradshaw, and, particularly, the noble Lord, Lord Berkeley. His is one of the experts in this House on rail and one always has to listen very carefully and thoughtfully to what he says.
	I, too, met the Minister, Tom Harris, recently. I also received a letter yesterday from the Minister in this House and I hope that in his reply he will reiterate some of the points he made. Some of my concerns were perhaps helped by the letter, which described a framework that puts a cap on excess charges and, in particular, sets out a clear supervisory role for the Office of Rail Regulation.
	These debates have been important and, I repeat, they were for the benefit of rail users and taxpayers. We all want to maximise any sale receipts—and I hope that some of them will be reinvested—for the benefit of the rail network, which we have talked about in several of our debates. I support this amendment and hope that the Minister will alleviate some of those concerns, as he did in the letter he sent to me yesterday.

Viscount Montgomery of Alamein: My Lords, I speak on behalf of my noble friend Lord Tenby, whose name is also attached to this amendment but who unfortunately cannot be here today. He has asked me to apologise to the House and to say a few words on his behalf.
	The noble Lord, Lord Bradshaw, got it right—independent regulation should be independent. The idea that the Government should be involved in regulating is not very sensible when you have appointed an independent regulator. So I entirely agree with what has been said by the noble Lords, Lord Bradshaw and Lord Berkeley. I agree with the noble Lord, Lord Hanningfield, that nobody knows more about railways than the noble Lord, Lord Berkeley, who speaks regularly on the subject. If the noble Lord, Lord Bradshaw, decided to press this amendment, I shall certainly support him in the Lobby.

The Earl of Mar and Kellie: My Lords, I, too, want the Channel Tunnel rail link to be a success. I remember the frustration of seeing the timetable showing that trains from Edinburgh would end up in Paris and I look forward to the time when Scotrail runs such services. In support of the amendments, first, I continue to believe that the Channel Tunnel rail link should be regulated by the Office of Rail Regulation. Secondly, I believe it is wrong to set a precedent of disconnecting the emerging high speed rail network from independent regulation.

Lord Dykes: My Lords, briefly, I add my support for this amendment and I thank my noble friend Lord Bradshaw and other colleagues. I also thank the noble Lord, Lord Berkeley, who knows more about the Channel Tunnel and the history of it than any other person that I have met in this place or elsewhere. I will be very brief, just a few seconds—I apologise profusely to the Minister, I hope he will forgive me for the discourtesy—because the meeting time of our Select Committee this afternoon has been changed from 4.15 pm to 3.30 pm. I have to be there at the beginning.
	If the Government make the right decisions on this amendment and indeed on the Bill, this is the chance for the United Kingdom to play a full part in the development of the future European high-speed rail network. One thing does lead to another, particularly with trains and railway lines. There is a lot involved in this and a lot at stake. This amendment would be very helpful indeed and I hope that the Minister will give it a positive response.

Lord Bassam of Brighton: My Lords, when we embarked on this piece of legislation, I remarked to friends and colleagues that I thought that it was an uncontroversial little Bill that might bring some light to the shade. It might help us further to develop the excellence of high-speed travel and help us with the disposal of the asset, which is the core of what the Bill is about—we may generate some useful and valuable funds for the continued investment and expansion of our rail system. However, I realised shortly after we embarked on the Bill that it would be a fraction more controversial than I imagined. Here we are at Third Reading and the controversy has continued apace.
	I think that all noble Lords who have spoken this afternoon and on other occasions have done so with the best interests of the rail network at heart. It is to the great credit of our House that so many noble Lords take such a profound interest in the growth, development and expansion of the rail network, which as we know is increasingly successful and doing extremely well. I hope that the comments that I make this afternoon will help. I am grateful to all those noble Lords who have spent time with me, reading correspondence that I have originated, who have seen the Minister, my honourable friend Tom Harris, or who have spent time with the diligent officials, who have put a lot of thought into how we approach this issue.
	It may be worth remarking at the outset that when in the mid-1990s—1996, I think—the original legislation went through relating to the development of the financial arrangements for the Channel Tunnel and the rail link in particular, the system of regulation that was put in place by, I think, Brian Mawhinney, now the noble Lord, Lord Mawhinney, was so uncontroversial as to provoke no comment from him and no debate at all on the issue. Clearly, things have moved on and noble Lords, and perhaps some Members in another place, take a slightly different view. Therefore, I was surprised that the question of who regulated in the early phase of the new arrangements was so controversial.
	There has been a lot of debate and it has been very welcome, but for the rest of this afternoon's discussion on this matter I shall endeavour to keep my comments to points that have been raised. I shall try to provide more explanation than we may have done in the past and I shall deal with some of the issues that I know still concern some noble Lords.
	As I explained at the outset, this is an enabling Bill that clears the way for the restructuring of London and Continental Railways and the eventual sale of its component businesses, notably High Speed 1. The proceeds from that sale will be used to offset the investment made by taxpayers in underwriting the cost of constructing the new high-speed line.
	Despite the heat of the debate, I believe that more unites us than divides us in this House, particularly in relation to the objectives of this enterprise. Those objectives are summarised thus: to maximise value for money for the taxpayer from any sale; to encourage the greatest use of the line; to secure its efficiency of operation; and to do so in a way that provides a level playing field for all operators and not just the incumbents. That final point is important. The Government do not want to see artificial barriers to entry, whether they are barriers of price, access or safety. The Government agree that, as far as possible, the operation of this line should be subject to the normal regulatory supervision. They also agree that the best value for taxpayers is likely to be secured by maximising stability and certainty for bidders, commensurate with the transfer of risks and incentives that we wish to achieve.
	The amendments would do that by replicating on the new line the regulatory arrangements that apply to the national network. The Government well understand the thrust of the amendments but believe that they are unnecessary. In practice, the difference between us is as follows. The Government wish to retain the right to set the cap on the maximum access, price or investment recovery charge that can be levied for access to the High Speed 1 railway. They intend to set the cap prior to the sale of High Speed 1 and it would not then be changed without the express agreement of the owners of High Speed 1 and the Secretary of State. The amendments would transfer the whole responsibility for setting the charging framework to the Office of Rail Regulation.
	There are three reasons why the Government wish to retain the single element of control. First, the price of access to High Speed 1 is a critical element of the sale process—it is a significant determinant of the value of the railway. The Government carry the financial risk for this and they have a duty to taxpayers to maximise value from the asset that they have underwritten. The Office of Rail Regulation does not have such a duty and we would not wish to be drawn down the path of giving new duties to the ORR—that is what the amendment would achieve—to ensure that an independent regulator arrives at the answer that we all want.
	Secondly, in this context we do not believe that the ORR would offer additional certainty to bidders for High Speed 1. The timing is uncertain, the range of possible outcomes, all of which might be equally valid in regulatory terms, are similarly uncertain and any revisiting of the charges, such as by periodic review every five years, is entirely outwith the bidders' control.
	Thirdly and finally, this railway is different from the national network. A traditional regulatory approach would seek to prejudge the value of the asset, fix prices against that and, consequently, determine volumes. In practice, the risk of each of these determinations would return to the Government. However, in the case of High Speed 1, the Government do not believe that such an approach is necessary; indeed, we believe that it would be unnecessarily constraining and produce an artificial expression of value. Instead, by establishing a cap on charges that is designed to be attractive to competition on the line, the market can then assess the value of the asset in the debt that it is prepared to raise against such future revenue and the operator can be given the incentives to chase business in order to maximise its returns against that value.
	Having said why we do not want to take that final step of handing price setting to the ORR, I shall explain what the Government want to do instead and how, within this, we nevertheless want to limit the boundaries of difference and maximise the normal regulatory approach. The Government will establish a charging framework. The principal purpose of such a framework is the standard one for all such documents: to ensure that the tariffs and procedures for determining access by the infrastructure owner are compliant with the relevant regulations. This charging framework will set a cap on the maximum charge that can be levied. There will be no minimum charge. The cap will also be contractualised within the concession agreement entered into with the successful bidder for High Speed 1.
	The purpose of the cap is to prevent artificial pricing barriers to entry—an issue that the noble Lord, Lord Hanningfield, was concerned about—and to protect the position of the domestic franchise operator, which is, after all, a largely captive customer. The purpose of doing this as a cap without a floor or fixed price is to enable the infrastructure owner to set rates that are level but competitive for different markets as it seeks to chase business and maximise usage and to enable it to respond positively to changes in the market, whether fluctuations in demand or fluctuations in operators' cost bases. In other words, the infrastructure owner is able on risk to chase volume and price in an open and competitive market, while operators are protected by the cap itself.
	The purpose of also putting the price in the concession contract is to give bidders certainty and to obtain best value for the taxpayer, both at the point of initial sale and thereafter. That is the point that unifies us all. Thereafter, with the charging framework established and the cap set, the Government's special interest ends. We will want normal regulatory processes to apply.
	What do I mean by that? I mean principally two things. The regulator should have the supervisory function, under the EU rail directives, to ensure that the infrastructure operator discharges its business in compliance with the network statement and the requirement of directives, particularly ensuring that the pricing of access is entirely fair and non-discriminatory for all operators that share similar markets. I know that the issue of non-discrimination is of particular concern to the noble Lords, Lord Bradshaw and Lord Berkeley. I think that we have answered that point.
	The regulator should also determine that the relevant documents and provisions—that is, the network statement arrangements for the allocation of access and supporting contracts—are compliant with the directives. The formal means of doing so is through its appellate functions. We do not see cause for delay in the introduction of these regulatory interests. They start and the Government bow out, if you will, at the moment when the new structures go live.
	I hope that we are largely there, but perhaps I may give a few more necessary safeguards and reassurances to the House. The noble Lord, Lord Berkeley, asked what reassurance could be given that the cap or charging framework would not be changed at the whim of the Government. That is a fair question. A principal assurance is to fix it also in the concession, providing contractual certainty for bidders. That is an important point. The Government would not then, in normal circumstances, expect to revisit this cap over the period of the concession.
	We must, however, allow for two possible exceptions. First, the charging framework may, from time to time, need updating to reflect any change in the governing directives. I am sure that all noble Lords will accept that point. Secondly, if the market for the line proves even more buoyant than we have forecast, as some analysts suggest, and therefore is able to make a greater contribution to the costs of construction, we should not artificially suppress that. In such circumstances, it will be open to the infrastructure operator to seek from the Government agreement to raising the cap—a not unreasonable position. The Government would seek in turn to see that a share of that additional value returned to the taxpayer. That would also take into account the approaches under the directive for responding to congested infrastructure—that is, when demand at the first established price outstrips supply.
	I emphasise again that the cap is a one-way constraint. If the infrastructure owner needs, as it is likely to, to set lower prices for some markets to attract business or to reduce prices should market conditions change, it is free to do so, provided that it does so on a fair and non-discriminatory basis in accordance with European regulations. Noble Lords will note that the regulator will have supervisory and appellate functions but will want reassurance that the key documents—the charging framework, the network statement and the access contracts—are compliant in the first instance. The Government want that, too. Without it, we introduce an immediate and unnecessary regulatory risk to the sale, which would undoubtedly reduce value. What is the point of publishing a network statement on Monday if it is only to be overturned by the regulator on appeal on Tuesday?
	We will of course subject those documents to the scrutiny of our professional advisers and—perhaps more reassuringly from a neutral standpoint—our approach will be subject to the scrutiny of the European Commission, whose approval of the necessary state aid is essential to the progress of the project; the Commission is unlikely to grant such approval until it is satisfied as to our compliance with the relevant directives. Thereafter, we will consult fully and publicly, including on the charging framework. That consultation process will include the Office of Rail Regulation.
	I must be careful. We could not, nor would we want to, have that consultation process fetter any discretion on the regulator in any subsequent appeals. Nevertheless, the Government want both the input and the advice of the Commission and the ORR to ensure that the charging framework is properly compliant. The regulator also has an interest in ensuring that the documents over which it will subsequently have an appellate duty, including the network statement and access arrangements, are not flawed in a way likely to precipitate unavoidable appeal. The process for consultation on the relevant documents is therefore a practical one whose effectiveness is formally underpinned by the independent scrutiny of the regulator, with its powers to overturn on appeal, and of the Commission.
	Finally, I need to say something about the efficiency of operating costs on the line. We have not fully touched on this, in part because the range of potential outcomes does not itself hang on primary legislation. At this stage, I can go no further than to provide a clear statement of the Government's principles and intent and ask the House to accept these assurances, which may be given expression through secondary legislation, through the application of existing primary legislation, such as the 1993 Act, or by commercial and contractual agreement.
	In trying to maximise returns and in so far as the market is competitive, the infrastructure operator faces an incentive to reduce operating costs to make prices more attractive and to increase demand while maintaining its margin—an issue about which my noble friend Lord Berkeley was particularly exercised. In the Government's view, such incentives are, to borrow an economic phrase, necessary but not sufficient. We have seen before how such incentives do not always work out in practice; we cannot rely entirely on the dynamics of the market for the whole period of the concession. Operators will be concerned at a risk that a future infrastructure owner regards these costs as a straight pass through to operators. In any case, there is also an efficiency requirement within the directives.
	The first statement is therefore one of clear principle. The Government believe that it is separately and additionally necessary to place incentives on the infrastructure owner continuously to improve the efficiency of operation and we want that to be reflected in the relevant subcontracts. The more open issue at this stage is how to deliver this. We must reflect that in the statement of principle that follows. The Government do not see themselves as the first and best regulatory option. The Government believe that the arbitration of what constitutes reasonable efficiency in the event of dispute is the natural territory of economic regulators. I cannot go further at this stage, as any such role is not currently or actively exercised by the Office of Rail Regulation. The route to future change may be administrative, regulatory or by contractual agreement.
	The objective of effective efficiency pressures is one that we share. It is the Government's intention that the efficiency of operation of High Speed 1 and the contract supporting any third-party operation and maintenance of the line should be subject to independent scrutiny. Subject of course to further discussion with the Office of Rail Regulation and the need to recognise or agree change to any existing contractual rights, it is the Government's preferred outcome that this scrutiny should be undertaken by the Office of Rail Regulation.
	Our intention with regard to the overriding duty given to the Office of Rail Regulation in relation to the development agreement under Section 21 of the 1996 Act is that this need not continue to apply to the new concession agreement under which the future owner of High Speed 1 will operate. I think that the noble Lord, Lord Bradshaw, understands my intent. We will explore in good faith how this might be achieved without recourse to primary legislation.
	I hope that noble Lords will forgive the length and the detail of this speech. I have no intention to bore the House much further, although I am sure that noble Lords will be interested. I hope that they will recognise the shared nature of our objectives, the reasons that the Government have given for the limited differences in approach—and they are limited—to this sale and operation and particularly the commitments given to tightly circumscribe the extent and the timing of the Government's special interests here and to establish the operation of the railway thereafter on a normal regulatory footing subject to the supervision and the appellate scrutiny of the Office of Rail Regulation, as should happen. I hope that with that lengthy explanation noble Lords will feel confident not to press their amendments.

Lord Ampthill: My Lords, before the Minister sits down, I wonder whether he will forgive me for a brief intervention, simply because I happened to chair the committee that looked at the original Bill, which this Bill amends. I was also chairman of the committee that looked at the father to the Bill, on the Channel Tunnel. Both were hybrid Bills. I merely wish to inform the Minister that I feel inclined to support the amendment as proposed by the noble Lord, Lord Bradshaw. As the Minister recognises that regulation is required, he might defer to the views that have already been expressed by this House in putting forward what I consider to be reasonable recommendations.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for his intervention. He played an important part in the earlier developments of the Channel Tunnel rail link. I think that I have answered the questions about independence. What I have been trying to do this afternoon is to provide a measure of reassurance that that is where we all wish to end up. For the purposes of the sale of the assets relating to the Channel Tunnel rail link, however, we require at this stage to maintain the system of regulation that was put in place in the 1996 Act and which, as I said at the outset, sparked no controversy at all.

Lord Bradshaw: My Lords, with respect to the last intervention, I believe that the Minister has dealt satisfactorily with the arrangements in Section 21 of the Channel Tunnel Rail Link Act 1996, because the agreement will be superseded by a new concession agreement. I thank him for his detailed explanation. He has given me satisfaction on almost all the points that were raised. I apologise to the House if it thinks that we have been somewhat long-winded but in fact we have passed this Bill in a very short time. I thank the officials, the Minister, the Minister in another place and colleagues who put their names to this amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 2 not moved.]

Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass.
	Moved accordingly, and, on Question, Bill passed.

Income Tax

Lord Davies of Oldham: My Lords, with the leave of the House, I wish to repeat a Statement made by my right honourable friend the Chancellor of the Exchequer in another place. The Statement is as follows:
	"With your permission, Mr Speaker, I should like to make a Statement on how I propose to deal this year with the consequences of the withdrawal of the 10p rate of income tax.
	"In the Budget last year, my right honourable friend introduced just two rates of tax, with the basic rate cut from 22p to 20p—the lowest rate for 75 years. At the same time, allowances for pensioners over the age of 65 were increased, and recognising that as the tax credit system became more developed and more generous we were better able to target resources on low-income households, we increased the working tax credit and the child tax credit as well as child benefit. As the result of these changes, more than 16 million households have gained, and 600,000 more pensioners will pay no income tax at all. Because of the changes announced in 2007 and in this year's Budget, 500,000 children will be lifted out of poverty—a record that no other Government have ever matched.
	"In my letter to the Chairman of the Treasury Select Committee three weeks ago, I said I would set out our proposals to help those who lost out as a result of the withdrawal of the 10p starting rate of tax for the longer term in the Pre-Budget Report later this year. As I said in my letter, my focus would be on changes to offset the average loss of £120 per household and that whatever conclusions we came to, the changes would be backdated to the start of this financial year. But I also said that I would not wait unnecessarily until November before setting out how we intend to proceed.
	"I said that I would look at the administrative practicalities of other options that some right honourable and honourable Members have suggested, including a one-off rebate or compensatory payment as well as changes to the tax credit system to allow the average losses to be offset. Having looked at this further, I believe that a rebate scheme would be complex and expensive to administer. It would also take time to set up, and changes to the eligibility for tax credits could not be introduced this year.
	"However, I can bring forward a proposal for this year that will offset the average loss and which will provide financial support more fairly, quickly and efficiently than any one-off rebate scheme, provided that we legislate for it now in this year's Finance Bill. For that reason, I am proposing to bring forward one measure from the Pre-Budget Report now. I want to help families on low and middle incomes as soon as possible. But my proposal for this year will not only help those on low incomes who lost out but also does more to help all basic-rate taxpaying families at a time when oil and food prices have been rising in every part of the world.
	"So, at a cost of £2.7 billion, I will increase the individual personal tax allowance by £600 to £6,035 for this financial year, benefiting all basic-rate taxpayers under 65. This will mean that 22 million people on low and middle incomes will gain an additional £120 this year, and 4.2 million households will receive as much, or more than, they originally lost. The remaining 1.1 million households will see their loss at least halved. In other words, 80 per cent of households are fully compensated, with the remaining 20 per cent compensated by at least half. In addition, 600,000 people on low incomes will be taken out of tax altogether.
	"People aged between 60 and 64 whose average loss was £100 will also receive the advantage of the increased personal allowance worth up to £120. They will also receive the additional £50 winter fuel payment for this year, which I announced in the Budget.
	"The increased personal allowance will apply to all income for this tax year and so will be backdated to 6 April. As a result, from September, basic rate taxpayers will see a one-off increase in their monthly income of £60 and then an increase of £10 per month for the rest of the financial year
	"Higher rate taxpayers were largely unaffected by the reforms announced last year so it is fair to focus this additional support on basic rate taxpayers only. However, as the £600 increased personal allowance applies not just to basic rate taxpayers but also to those paying tax at a higher rate, I am therefore reducing the threshold at which an individual starts to pay tax at the higher rate by £600. The net effect of these changes is that the tax liability of everyone who currently pays tax at 40 per cent will be unaffected by the increase in the personal allowance. Those brought into the higher rate will gain by up to £120 this year. I propose to legislate for these changes in this year's Finance Bill so that taxpayers will get the benefit from September.
	"Raising the personal allowance is simpler than other solutions. It retains the benefit of a simpler tax system and allows basic rate taxpayers to see the benefits as soon as possible, and for the whole of this financial year.
	"My proposal will also provide additional support for individuals and families for this year, including those on middle incomes who have currently benefited from other reforms announced in 2007. We are providing this support at a time when they are facing additional costs. I have brought forward this measure from the Pre-Budget Report in order to ensure that people get the benefit as soon as possible. I shall set out proposals for next year and beyond at that time.
	"As I made clear at the time of the Budget, it is right and sensible to allow borrowing to rise and investment to be maintained as the economy slows. Debt is lower than in the past, and low by international standards. Our fiscal policy, like our monetary policy, is designed to support stability in these uncertain economic times, generated by the turbulence in world financial markets and global commodity price inflation. I am able to finance this proposal through borrowing this year, ensuring that we do not take money out of the economy at this time. I will, of course, set out my fiscal projections and decisions in the Pre-Budget Report as usual, consistent with the fiscal rules and in line with the requirements of the code for fiscal stability. For future years, our aim is to continue the same level of support for those on lower incomes and I shall bring forward proposals to do that at the Pre-Budget Report.
	"The change that I am announcing today represents the fairest and most effective way to help all those affected as a result of the changes proposed last year. In addition, this family tax cut provides support this year for those on middle incomes at a time where they face increased bills, so supporting the economy. I commend this Statement to the House".
	My Lords, that concludes the Statement.

Lord Strathclyde: My Lords, I thank the noble Lord for repeating that emergency and unprecedented Statement. He will know, as the rest of the House does, that I lay no claim to being the greatest expert on finance in this House, but I think we can all see that the television correspondent who said last night that the tax change was one of the most spectacular political blunders of modern times was, if anything, making an understatement.
	All of us who were out campaigning in the recent local elections know that the astonishing meltdown in the Labour vote has been related directly to the sense of shock and injustice across the country that a Labour Government could have set out to target the poor. When I look across the Chamber and see those stalwart servants of a great party who have given a lifetime to the Labour movement, I know not one of them gave their service for that.
	What is worse is that the cut in low take-home pay has kicked in at the very time when household budgets are being pole axed by rises in fuel and food prices. They face new taxes on their meals, their cars, their quiet pint or their glass of wine. Even their dustbins are now to be taxed almost daily. It comes in when inflation has jumped by the largest amount for six years, and it comes in when even the Housing Minister has let slip that house prices will fall by up to 10 per cent this year and, as she puts it:
	"We can't know how bad it will get".
	People are hurting. Ordinary families are fearful, and that is why this decision has hit homes so hard. They feel that the Government simply do not understand.
	I have some sympathy for the Chancellor of the Exchequer. Like everyone else, he knows where the blame for this fiasco lies. It lies with a Prime Minister who knew, when he announced the abolition of the 10p rate as Chancellor, that his plot to unseat Mr Blair had succeeded. It lies with a Prime Minister who thought, when he announced it, that he would have had a general election before it came into effect, only he lacked the courage and decisiveness to call that election and now those problems are rebounding on him. We should not make the Chancellor of the Exchequer, still less the noble Lord, Lord Davies of Oldham, the fall guy for that, but we can all imagine what the noble Lord really has to say in private when he is on the train home north with his Back-Bench colleagues, although I am sure he puts it in better language than the Cabinet vocabulary revealed in Mr Prescott's memoirs.
	The Government should apologise profusely to the 5.3 million families who have been hit by Mr Brown's policy. My colleagues in another place will look carefully at the details of today's announcement. We and 5.3 million families have learnt to wait for the small print with the Prime Minister before coming to any final conclusions. But we welcome this anyhow for all those hard-pressed families, although we are far from clear whether they have been compensated adequately. Can the noble Lord confirm that all 5.3 million families who have lost out will be fully compensated? Can he confirm that all compensation will be backdated, and does he accept that the discredited system of tax credits, which so many people of all ages fail to claim and which in many cases is incorrectly calculated, is no long-term solution to social need?
	We are now seeing an era of record spending, record taxation, record borrowing, constant fiddling with the tax system and massive over-regulation collapsing in chaos and confusion. Confidence in the country is collapsing, confidence in the Prime Minister is collapsing, and the unedifying and distasteful succession of tawdry memoirs from the Downing Street court reveal a Government riven by hatred, jealousy and petty rivalry. Thank goodness that we are spared that in this place. It is a picture of a Government obsessed with internal battles for power and out of touch with the real worries of the public. That is why the whole fiasco of the 10p tax rate has been so damaging: lack of touch, lack of feel, lack of vision, and a Government who no longer know how to lead or to listen. This belated bungling lurch of a U-turn offers no hope for the future of our country or for those millions of struggling families caught up in the mess that the Prime Minister himself has created.

Lord Newby: My Lords, I thank the noble Lord for repeating the Statement. It would have been even more satisfactory if we had had sight of it in advance. Dealing with Statements on tax changes completely on the hoof is extremely difficult, particularly as over the years this Government have become a dab hand at couching Statements in terms that require a little reading before they can be fully understood.
	It is a great pleasure to follow the noble Lord, Lord Strathclyde. His outrage on behalf of the poor is a wonder to behold. I am privileged to have been here to listen to it. I have not heard it from those Benches in the past, and unless I have missed something, I heard nothing today about what the Conservatives would have done, how they would pay for this, or any vestige of a policy whatever. That substantiates what seem to me to be completely vacuous claims to have at the heart of their philosophy those hard-pressed families to whom the noble Lord referred so movingly.
	As a result of what the Government have done and the Chancellor's announcement today, 20 per cent of those who would have lost out from the abolition of the 10p tax rate will still lose out. Our suggestion would have ensured that no one lost out. A calculation would have been made in terms of the combined effect of the lowering of the basic rate and the abolition of the 10p rate on each individual's tax liability and an individual tax rebate made to compensate those individuals. We asked tax practitioners about the feasibility of this. We understand that the Low Incomes Tax Reform Group was, in any event, about to propose it. That method seems to fulfil what the Chancellor said that he was going to do; namely, to ensure that no one would be worse off. As I say, unless I am mistaken, 20 per cent of those who would have been worse off—more than a million families—will still be worse off as a result of the Chancellor's Statement today. Can the noble Lord confirm that 20 per cent of families will still be worse off as a result of what the Government have said today?
	The second leg of this equation is how one pays for the £2.7 billion of extra expenditure that this change will cause. The Conservatives have no suggestion to make. The Government are clawing back some of the cost by reducing the tax threshold on higher rate taxpayers but I think the noble Lord said that, to the extent that there was a shortfall, the Government would finance it by borrowing in this financial year. Given the state of the public finances, any further borrowing at this stage is most unwise. We would have urged the Government to consider—although I suspect that our urging will not force the Chancellor to change his mind—deferring the benefit of the reduction in the basic rate—the 2p cut—for those on very high incomes, say, over £100,000 a year, for one year. So, in this year at least, there would have been no additional cost to the Exchequer from this change. There is a precedent for such a move. The former wild left-wing Chancellor, Roy Jenkins, made such a levy for one year only during his period as Chancellor of the Exchequer.
	This is a sorry Statement by a sorry Government. To listen to it without hearing any of the background, one would have thought that it was a great idea long in gestation and that it will help to save poorer families from undue tax burdens. However, we know that this has been occasioned by a Back-Bench rebellion that has had a very slow fuse but a final major explosive effect. The timing of today's Statement is entirely related to the holding of the Crewe by-election next week. It is a shoddy Statement by an increasingly shoddy Government. We can join the Conservatives in only one respect—in denouncing the process which has led to it being made today.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords who have responded to the Statement. I agree with the noble Lord, Lord Newby, that it comes as something of a shock to many in this House, and it certainly will have done in the other place, to discover just how sensitive the Conservative conscience is about the poor. The Government have taken 600,000 children out of poverty. Who on earth was in power when those children were in poverty, if it was not the Administration of the other side? We are only halfway to our target, such is the depth of poverty in this country.
	We have always maintained, as we do with this Statement, that we will continue to concentrate our resources on the less well off in society and to eradicate poverty. The Opposition are present only when there is some issue with regard to taxation that they can address for short-term political advantage. They never at any stage participated constructively in the debate about what was to be done about the situation in which the country found itself, nor have we had any indication today of an alternative strategy for dealing with this issue.
	The Government, however, have made it clear through the Statement that we intend to fulfil the objectives we had all along. First, we want to make the taxation system as simple and straightforward as possible, hence the clear reduction from 22 per cent to the settled standard rate of 20 per cent. Secondly, we want to address those groups of people who are identified as having lost out through the abolition of the 10p position. We have done that.
	The noble Lord, Lord Newby, has the merit of suggesting alternative strategies. His position is one in which no relief would be given to hard-pressed taxpayers this year, by definition; when he says that every individual case should have been analysed, calibrated and calculated, he is enjoining a full budgetary process. It would take the time of another Budget, and relief for hard-pressed families would have to wait upon that development. The Government have recognised the great public concern about the position and taken action that produces the quickest possible remedies for this position.
	I confirm to the noble Lord that 80 per cent of taxpayers will be compensated in full. We always said that we were about compensation for the average of the loss, for the simple reason that any other approach would require a degree of calculation that would incur significant delay. In order that we are able to act quickly we have to make broad judgments and take a broad decision about the question of the tax threshold, which, as the noble Lord will recognise, we have done. We are making it clear that the other 20 per cent will be compensated at least to half of what they have lost, so there is compensation for those people too, but there will be full compensation for 80 per cent of those who lost out.
	The noble Lord, Lord Strathclyde, indicated that he was concerned about the state of the economy. We are all concerned about that; we recognise the global forces that are at work. We can recall that when oil prices went up to considerably less than they are today, the other side was in government and reaping the benefits of those increased prices without there being much of an onslaught on the issue of poverty, despite the resources it enjoyed. Now that Britain is no longer a major producer of oil—I am not discounting North Sea oil, but we all recognise that the energy position has changed—high oil prices affect us significantly, as do food prices, but we are not even halfway to the levels that the other side was prepared to tolerate year after year in inflation rates, house price increases and, crucially for the welfare of our people, high unemployment levels, thereby rendering ordinary families vulnerable.
	So we will not take any lessons from the other side on the politics of this position. I respect that the noble Lord, Lord Strathclyde, does not specialise in economics, and he made the best fist he could of the general political situation, but the country will judge whether the Government have acted effectively and judiciously. I have not the slightest doubt that the country will recognise that the Government are taking massive steps to remedy a problem which had occurred and which is now largely tackled.

Lord Howe of Aberavon: My Lords, it is an astonishing thing to hear the noble Lord holding forth about general economic problems—oil prices, oil revenue and everything else—when he only occasionally refers to the proposition that he is talking now about remedying the consequences of a grotesque misjudgment which ought never to have taken place. All the rest of it is irrelevant to the changes being made and announced today.
	What astonishes me is that the abolition of the reduced rate band was not being done for the first time. In my 1980 Budget I said:
	"The case for the lower rate band was never at all clear ... Its disappearance will simplify and shorten the PAYE tables and reduce the administrative burden on employers and on the Inland Revenue".
	Some 1,300 Inland Revenue jobs were removed as a result of that simplification, so it was an entirely justifiable thing to do. But the way in which this Government have set about doing it is not by any straw of the imagination justifiable. In that Budget I said:
	"I intend to remove the lower rate band of taxation",
	which was then running
	"at 25 per cent. on the first £750 of ... income".
	At the same time, I decided,
	"to increase the main income tax allowances by 18 per cent. or so"—
	in other words, to raise the threshold—but
	"not to raise the higher-rate thresholds fully in line with inflation",
	in order to avoid giving undue benefits to people at the higher end of the scale.
	I summed it up in these terms:
	"This combination will protect the position of the very poorest taxpayers whilst ensuring that basic rate taxpayers receive some, though not complete, protection from the rise in prices".—[Official Report, Commons, 26/3/1980; cols. 1475-76.]
	In other words, the exercise was fully thought through and effectively conducted. The chaos we have been facing in the months since the current Prime Minister introduced these changes last year is a wholly self-inflicted wound caused by lack of competence and a failure even to study the precedent that we had set for them 27 years earlier.

Baroness Royall of Blaisdon: My Lords, may I respectfully point out that this is an opportunity to question the Government on the Statement and not to make statements?

Lord Davies of Oldham: My Lords, the noble and learned Lord, Lord Howe, charged me with commenting more generally about the economy, but I was merely replying to the noble Lord, Lord Strathclyde, who was kind enough to introduce those wider issues of the economy and the situation in which the nation finds itself at present.
	The noble and learned Lord described his Budget of that time, a time when poor and lower income families had none of the advantages of tax credits or the additional benefits that support families in need and have made such significant inroads into the level of poverty in this country. I recognise that he identified a Budget of many years ago that pursued that strategy, but over the past few months I have not seen his friends in the other place identifying that the solution they wish to put forward is to follow the noble and learned Lord in his Budget of 1980.
	The noble and learned Lord will, however, recognise that the Government have acted fairly regarding the vast majority of people whom we have identified as losers from the abolition of the 10p position—a position which, after all, was introduced in 1999 with the specific objective of aiding those who were less well off. It was a quick and immediate method of bringing advantages to them. However, this tax rate should no longer play its part in our strategy for remedying poverty. That is why we have abolished it and why we now have compensation in place for those who lose out from its abolition.

Lord Taverne: My Lords, I welcome the Government's Statement and their belated conversion to a more effective approach. Do they now firmly agree that, as the noble and learned Lord, Lord Howe, pointed out, it is an elementary fact of our tax policy that a multiplicity of rates and lower band rates are not the best way of aiding the poor and do not simplify the tax system? I personally think that the introduction of the lower rate by the noble Lord, Lord Lamont, was a great mistake and that the Government were right to abolish the 10p rate. However, will the Minister convey to his colleagues that the best way to approach this is not to pursue tactical advantage but to keep the tax system simple and raise the thresholds, which they should have done in the first place, and not to go for a gimmick?

Lord Davies of Oldham: My Lords, I agree with the noble Lord, Lord Taverne, because he merely confirms the objectives of the 2007 Budget, which were to simplify the tax system by having a standard rate of 20 per cent and to abolish the 10p rate. The Statement addresses the consequences for some people of the abolition of the 10p rate. We recognise that it was a mistake not to have recognised that at the time. Of course we subscribe to the principles that the noble Lord mentioned with regard to the Budget, but he will recognise that tax is only one dimension of building a fairer, better and more equal society. Measures such as tax credits and child benefit are of great importance in targeting poverty in a way which is very difficult to achieve through the tax system.

Lord Barnett: My Lords, with great respect, the noble Lord, Lord Strathclyde, should stick to not speaking on financial matters. He should not describe the whole thing as a spectacular blunder when he and his honourable and right honourable friends in another place never for one moment referred to it as that when the 10p rate was introduced. In fact, they opposed the introduction of the 10p rate and they opposed its removal. He should therefore be careful when talking about spectacular U-turns and political rants. However I am very fond of him, and I shall want his support on occasion, so I will say no more.
	I regret the exaggerated statements that were made on all sides. I very much welcomed the abolition of the 10p rate and the creation of a simple lower basic rate of 20 per cent at the time and I welcome it now. But I regret that it was done in this way in response to a Back-Bencher in another place who had a reputation for being a brilliant young man when, with respect, it should be recognised that he did not know a damned thing about taxation or anything else to do with these matters. However, for the noble Lord, Lord Strathclyde, to refer to higher food and oil prices as if they were all the fault of this or any other Government in this country or anywhere else is nonsense, and he must know it.
	Can my noble friend say whether those who are still not benefiting to the full are largely low-paid single people who had just gone into jobs and who will soon be moving out of those jobs and benefiting from the 20p basic rate? Is that the sort of figure we are talking about?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend. I share with him the two positions that he adopted with regard to the noble Lord, Lord Strathclyde; namely our affection for the noble Lord and, at the same time, our recognition of his ability to be a political opportunist when it suits, as I think he was in his comments today. As for my noble friend's more specific comments, I shall not go over the virtues of colleagues in the other place.
	Those whom it is difficult to compensate accurately are exactly those who may not be in employment on a continual basis. But they may have great hopes of landing jobs, and when they do on a permanent basis then they will fit within the category of those we are able to compensate. As the House will appreciate, part of the difficulty in dealing with several of these groups is that they are very hard to identify. The only way of doing it comprehensively is the way that the noble Lord, Lord Newby, identified. That is a massive task and it would not meet the requirements of early action that the Government have deemed necessary.

Lord Forsyth of Drumlean: My Lords, surely the Minister recognises that it is not the only way. The Government were right to cut the basic rate of tax to 20p and to abolish the 10p band which the Chancellor, now the Prime Minister, introduced. This Statement is welcome in so far as it is raising the threshold. However, the right thing to do was to raise the threshold to the level at which the 10p band operated. The effect of this change means that people on quite low incomes of £8,000 a year will pay twice as much in tax as they were paying before. Their marginal rate of tax has doubled. The Minister blithely says that it deals with 80 per cent, but what about the 20 per cent on low incomes? Why did the Government not raise the threshold to the level at which the 10p band bit, as my noble and learned friend said he did in his Budget more than 20 years ago?

Lord Davies of Oldham: My Lords, because the Government have prudent regard to the public finances, as I am sure the noble Lord would enjoin us to do. As he recognised, the sums involved in producing this solution are significant and the Government have a limit on the resources they can provide. However, the Government do not rely only on the tax system to achieve fairness for the less well-off; we have other forms of benefits and allowances to ensure that we tackle the deep-rooted levels of poverty that we inherited. The previous Government must stand arraigned for the fact that it has taken us a decade of committed hard work and substantial sacrifice by the nation to tackle the formidable levels of poverty for which they were responsible.

Lord Elystan-Morgan: My Lords, I accept that the Government have genuinely attempted to recompense 80 per cent of those who have suffered disadvantage from the changes that were announced last year. I also accept, as I trust the Minister does, that it is very difficult to forecast exactly what the effect of fiscal policies will be. Will the Government therefore keep an open mind and look at the situation in 12 months' time to see whether there is any identifiable group of persons that clearly remains to be compensated and, indeed, to bring about such a scheme?

Lord Davies of Oldham: My Lords, I agree with those sentiments. As I think the noble Lord will recognise, we think that we have gone as far as we can by fully compensating four-fifths of the losers and compensating all losers on average to at least a half of the losses they sustained. Of course we will look in the maturity of time at the development of the next Budget to address precisely that issue. We recognise the unfairness of it and the groups that have been identified. The problem is that it is easier to define the groups as a broad category but much more difficult to target the resources that must be directed to them. In fact, the tax system could scarcely do that. That is why the solution produced by the noble Lord, Lord Newby, is made in heaven rather than in the United Kingdom.

Lord Radice: My Lords, does my noble friend agree that the Government have made a mistake, that they have very properly responded to pressure from their own Back Benches and from the voters, and that they have come forward with a solution which, it seems to me, having listened to the debate, has pretty universal acceptance?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend, because he can express in a few words that which I find rather lengthy.

Lord Higgins: My Lords, is it not important to put this in perspective? It is a cost of £2.7 billion. How does that compare to the overall cost of Northern Rock? None the less, £2.7 billion is a lot of money, which is to be financed by borrowing. Will the noble Lord confirm that the borrowing will, sooner or later, be a burden on taxpayers and that the Chancellor is merely burdening some taxpayers to compensate others?

Lord Davies of Oldham: My Lords, certainly the resources that are available to government largely come from taxation; that goes without saying. The noble Lord is right to identify the £2.7 billion. He will also appreciate that there is no indication—nor do the Government ever intend—that Northern Rock will be costly. It is not to be a burden on taxpayers. The other side has gone rather quiet about the recent developments with Northern Rock. That may well be because the strategy that it is pursuing is putting it fully within the framework of eventually reaching the target of being able to repay to the Bank of England that which it owes. The £2.7 billion is a significant sum; no one underestimates that factor. Of course, if we are about redistributing resources and dealing with those more deserving sections of the population, costs are involved. The noble Lord will recognise that the Government have at the same time reduced the basic rate of taxation from 22p to 20p. He must recognise that on the other side of the ledger.

Lord Clinton-Davis: My Lords, does my noble friend agree that what we have heard from the Conservative Benches today is absolutely nonsense? They are speaking with a forked tongue. In another place, they behaved in a completely contradictory way, did they not? To pretend now that they are the friends of the very poor is grotesque. If nothing was done, they would be the first to complain. When the Government react in a totally sensible way, as they have done, they will say that it is out of panic. Is it not palpably clear from the episodes that we have witnessed that the Opposition have absolutely nothing constructive to contribute to this very important issue?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend for his objective analysis of the Opposition's position. The Opposition will recognise in due course that it will not do just to criticise. At some stage, they have to produce alternative strategies for problems. Did anyone hear an alternative position from the Opposition on the 10p issue? I certainly did not.

Lord Christopher: My Lords, I thought that the real spectacular in tax of modern times was the poll tax, but perhaps that is not something to talk about. I have one question. My noble friend the Minister has indicated that the Government will look again at the possible position of the 20 per cent. I wonder, from what little I know of the department, how that might be done. Yesterday's Financial Times listed it as the second worst performing department of Government and I do not see how this 20 per cent will be recognised by anybody outside the department. I do not think that the Revenue will establish any tests unless it is required to do so. How will these people be identified? I see a great difficulty.

Lord Davies of Oldham: My Lords, it is difficult—that is why it is not part of the general solution. I say, of that category, that we have succeeded in halving the loss that it will sustain. My noble friend is right to say that dealing with the totality of the position requires an enormous amount of work, which would have prevented any action before the end of the year. However, it is very much in the interests of everyone in the country, particularly those on low pay, that we solve the problem to the extent that we have in this Statement.
	With regard to the poll tax, that was nearly universal in its impact. We must recognise that the issue of the 10p rate was significant—5.3 million of our fellow citizens suffered. However, their losses were a fraction of the general shambles for which the poll tax is remembered.

Child Maintenance and Other Payments Bill

Lord McKenzie of Luton: My Lords, I beg to move that the Bill be now further considered on Report.

Moved accordingly, and, on Question, Motion agreed to.
	Clause 15 [Repeal of sections 6 and 46]:

Lord Kirkwood of Kirkhope: moved Amendment No. 13:
	Clause 15, leave out Clause 15

Lord Kirkwood of Kirkhope: My Lords, Amendment No. 13 stands in my name and in the name of my noble friend Lord Addington. Amendment No. 14 is also in the group. Taken together, they are an attempt by myself and my noble friend to ask the House to consider what might happen if the hope and expectation that has been driving the policy changes in the Bill do not come to fruition and the situation does not improve.
	Amendments Nos. 13 and 14 would make conditional the abolition of Section 6 of the Child Support Act 1991, which requires all parents with care who are claiming benefit to claim child support at the same time. The lifting of the Section 6 requirement would be subjected to a review after three years, in 2011. That review would be laid before Parliament and would have to establish, in respect of parents with care on benefit, whether their position in relation to the adequacy of the child maintenance they were receiving had improved, deteriorated or remained the same. If their position had demonstrably deteriorated after a three-year period, the obligation to use the statutory maintenance system as a condition of receiving income support or income-related jobseeker's allowance would be reinstated.
	The Minister is aware of the provenance of the amendment. Some of us following the proceedings of the Bill have become increasingly worried about how the abolition of Section 6 will work. The amendment is set against the background of a department that rightly will concentrate over the next few years on child poverty. One of the two indicators by which the department will measure progress is the number of children benefiting from child maintenance. This is a key factor in the Government's policy, as well as a concern to Members of this House.
	I start by shading in some numbers that we are talking about. I refer the House to the Child Support Agency Quarterly Summary Statistics: March 2008. Table 13.1 deals with the percentage of cases where the parents with care on income support or jobseeker's allowance have a positive maintenance income. The figures are revealing. The overall agency figures for the latest date available, May 2007, show that there were 441,000 assessed cases, of which only 156,000, or 36 per cent, had a positive maintenance outcome and received benefit. Footnote 2 on that table is instructive. The first sentence states:
	"The Child Support Agency's PSA target was to 'double the proportion of parents with care on Income Support or Income-Based Jobseeker's Allowance who receive maintenance for their children to 60 per cent by March 2006' ".
	I repeat,
	"60 per cent by March 2006".
	That table, produced in March 2008, indicates that in May 2007 that figure was 36 per cent. There is a long way to go.
	Obviously, some of the changes that the Government are making will help, such as the proposal to increase the disregard for maintenance to £40 per week in 2010. I hope that that helps. The Government are bringing in a new information and support service for parents with care and I hope that that helps, too—I am sure that it will. However, there is a risk—I put it no higher than that—that the maintenance available to parents with care on benefit after Section 6 is abolished might actually get worse.
	We also need to look at the numbers of people who are eligible to receive child maintenance in Britain. We know from the Government's own figures published by the department in December 2006, A New System of Child Maintenance, Cm 6979, that around 2.5 million parents were eligible to receive child maintenance in the UK. We know that 49 per cent have no child maintenance arrangements at all, 19 per cent use the Child Support Agency and 23 per cent have private arrangements. That is the current breakdown as assessed by the Government.
	The department carried out some research on those not using the Child Support Agency. The recently published study by Kazimirski and Ireland, Survey of Relationship Breakdown and Child Maintenance, interim DWP report No. 468, interestingly shows that of those eligible parents not using the Child Support Agency around a fifth, 22 per cent, said they preferred not to receive any child maintenance. More than a quarter, 29 per cent, said that they did not know where the non-resident parent was and a third said that, as far as they were concerned, the non-resident parent either could not afford to pay or would not pay any maintenance. These are difficult statistics and a lot of work has to be done. The information and support service that the Government are bringing forward has a huge job to do in trying to turn some of these figures around.
	On the other side of that issue, we know from departmental research that a third of parents with care on benefit have said that they feel confident or very confident that voluntary arrangements will work for them. That is good news and we hope that that figure will increase, but it is very important that the Government keep an eye on private maintenance arrangements made by those on benefit and monitor how satisfactory they are—not just in terms of the amount but the frequency and adequacy of the help that is provided to the children that the arrangements are designed to support.
	This amendment proposes that a report should be laid before Parliament in 2011. By that time the new commission will have had a chance to put its house in order and get some idea of how effective its new powers are. The amendment also seeks to establish the amounts being paid and with what regularity in order to enable the House, in three years' time, to make a comparison with how the voluntary system that we are going into can be compared and contrasted with the statutory system that we are coming out of. In the event that fewer parents with care on benefit are receiving child maintenance compared with the position now, or that the average amount of child maintenance received per child is not increased over the next three years, there is arguably a case for reinstating the automatic use of the statutory maintenance system where parents with care claim income-related benefits.
	This is not a perfect solution. There are a lot of ways—this is the only one I could think of—of trying to put in some kind of review process, some kind of sunset clause, some sort of compulsion on the Government to ensure that they are watching very carefully what is happening under the new system so that it is not the poorer families who suffer most should things not go according to plan. I beg to move.

Baroness Hollis of Heigham: My Lords, first, I apologise to the House. I have an unavoidable commitment which means I have to leave at 5 pm. My timing has been slightly thrown by the Statement. I wanted to speak to this amendment because there is much that is good in this Bill. My noble friend in particular, and officials more generally, are entirely right to congratulate themselves—I certainly wish to do so—on delivering from Her Majesty's Treasury what my noble friend's predecessors singularly failed to do; a decent maintenance disregard for new cases and a smaller but still welcome version for existing cases. All of that is terrific. If it works, more money will go to poorer children. That is what we are concerned about and we come to this issue with good will.
	The good effects of this on child poverty will be undermined by the new voluntarism, which remains unsafe. Why do we think that because many non-resident parents resist paying when it is a statutory duty, they are more likely to pay when it is voluntary—and to that extent, discretionary, and to that extent, optional? Let me put it bluntly. I fear that the wish of the commission to reduce its caseload will collude with the wish of NRPs to pay less—if at all—and the wish of parents with children to avoid hassle with their ex-partner and to take what is on offer. It is a win-win for everybody except for the one group that matters, which is children. Essentially, the Government are relying on the greater generosity of the disregard to encourage lone parents into pressing for maintenance within a voluntary system. I am not sure whether, in policy or psychological terms, that is sound.
	We had similar arguments many years ago about good cause. I was then urged by voluntary organisations to have generous exemptions for good causes such as violence. I now think, on reflection, that those voluntary organisations were wrong and I was wrong. All that did was promote bullying by some NRPs and threats of violence encouraged by some dreadful father's groups—I will not call them fathers' groups; they were men's groups—to avoid the parents with children naming them and the Child Support Agency pursuing them.
	Of course, the best option is for the full sum to be paid reliably and voluntarily. If one can remove Section 6 and ensure nonetheless that that happens, that would be wonderful. I do not think that that will be the case. New fathers, particularly new fathers who are coming out of casual relationships where the parent with care tends to be on benefit, as opposed to divorced fathers who tend to have a long-standing commitment to their children, have to be educated into their financial responsibilities. For many of them it will be a grudging process. In fact their own mothers, the paternal grandmothers, may be the key to all of this. We seem to be so concerned to overcome the distinction between families on benefit and the families that are not and to establish a form of level playing field that we lose sight of what really matters, which is to ensure that mothers with care on benefit who have the greatest difficulty getting the maintenance that they are due will actually get it in future.
	My noble friend is relying on the information and advice service, but I hope that he is right to do so. I congratulate him on making it as robust as it seems to be but I fear that, over the years and under pressure, it will be one of the things within the DWP to go, in the same way that similar services have unfortunately withered.
	I believe that voluntarism should be a reward for steady payment from the NRP, not a risk that we appear to be taking on behalf of poor children. As my noble friend will know, I favour placing everyone on a statutory system and if, after one year, payment flows regularly, as a reward one can move on to voluntarism. That would mean that the lone parent would know what she was entitled to; there would be a year of experience in the pattern of payments; the direct debits and so on would be established; there would be an expectation of receiving the payment and taking it for granted; and the NRP would be likely to be co-operative in the hope of getting and retaining voluntary status. The lone parent would know that she could freely return to a statutory scheme when she was psychologically willing to do so. In other words, we would have conditional voluntarism.
	Ultimately, despite all the very good—indeed, wonderful—things that the Bill does for children, I am not persuaded that we have sufficiently built out the risk of going for pure voluntarism. I am not enthusiastic about the amendment because I do not think that it goes far enough, but it is better than nothing at all in the sense that it seeks to track whether money is flowing to children and whether the fears expressed today are warranted as regards the future. I hope that our fears are not validated, but how will we know?

Lord Skelmersdale: My Lords, I am afraid that I am not particularly enamoured by Amendment No. 14 in the name of the noble Lord, Lord Kirkwood. It would make the abolition of Section 6 of the Child Support Act 1991—which, as he said, requires all parents with care claiming income support or income-based jobseeker's allowance also to claim child support—conditional. The lifting of the Section 6 requirement would, according to the amendment, be subject to a review after three years. This review would be laid before Parliament to establish, in respect of parents with care on benefit, whether their overall position in relation to the receipt of adequate child maintenance had improved, deteriorated or, as the noble Lord said, remained the same.
	I have difficulty with the amendment because I think that it enforces too rigid requirements on parents. Although the Government have an obligation to protect vulnerable citizens—indeed, someone said to me the other day that they are almost a replacement parent in some social security/DWP circumstances—we must not let their parental roles transform the country into a nanny state. The noble Lord, Lord Kirkwood, may point out that there is a risk that when the legal obligation to seek statutory child maintenance is abolished for all parents, the number of parents with care on benefit who receive child maintenance may actually decrease from the already low figure of 156,000. The noble Baroness, Lady Hollis, made the same point.
	I think we should recognise that the provision for child maintenance has not gone—the parent has simply been given the choice whether to use CMEC. I can only assume that the responsible and sensible parent will, indeed, claim. For the Government to keep an eye on the private maintenance arrangements—of which, as I said, I am not nearly as suspicious as the noble Baroness, Lady Hollis—made by those on benefit, as the amendment demands, there must be a voluntary register. Perhaps the noble Lord, Lord Kirkwood, did not take in that in Committee the Minister said repeatedly that no such register will exist, although I sincerely regret that and do not think that the Minister shone his usual thoughtful light on this subject.
	The basic problem, which was almost identified by the noble Baroness, Lady Hollis, is that the Minister—wrongly, I believe—is adamant that there should be no register of voluntary maintenance arrangements. Therefore, how will it be possible for the Secretary of State to prepare the report proposed by the noble Lord, Lord Kirkwood, in new subsection (2) of his amendment? I remain of the opinion that there should be a way of creating such a register but, even with the length of time that the Bill has taken to get to this stage—we are squeezing against a particularly nasty wire in another place, as the Minister recognises only too well—I have been unable, with the limited resources at my disposal, to find a way to achieve it. Only the Government, with their army of officials, can do that and, regrettably, not only did they not, but they will not do it. I am sure that my great party, in government, will indeed succeed in this. I can assure the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Hollis, that this subject remains on the agenda, but I am afraid a little patience is required.
	Further, if this Bill is to succeed, we must invest trust in its proposals. If CMEC is to encourage a voluntary sector of child maintenance payments as an alternative to statutory child maintenance payments, the Government must wholeheartedly stand behind their commitment and not temper voluntary arrangements with surreptitious control. This amendment could endanger the anticipated parental enthusiasm and commitment to the new arrangements as a result of state diktat, which, in part, is why the CSA failed. The result would surely be the worst of both scenarios. Until we have a voluntary register, I am afraid the issue is dead.

Lord McKenzie of Luton: My Lords, I thank each of the noble Lords who have spoken in this debate. It has been short but we have a shared vision that we want this to work, particularly for vulnerable parents and children. Clearly, we take different views on some key issues. Removing compulsion by repealing Sections 6 and 46 of the Child Support Act 1991 is the first step in moving to a new system of child maintenance. Compulsion was originally introduced as a means of recovering benefit expenditure and overturns any arrangements that may already be in place, even where these are working perfectly well. Forcing parents to use the state system in this way can result in conflict between parents. We know from our research that many parents would prefer to make their own child maintenance arrangements. As we have discussed extensively, both in Committee and last week, the information and support service will be made available to help parents make their own arrangements and the right decision. Those who do not want to use the statutory maintenance scheme will no longer be required to do so. Parents with care applying for benefit will have their details referred to the information and support service by Jobcentre Plus. If they choose to use the service, all the options available to them will be explained. Parents will be free to make a voluntary arrangement or an application to the statutory maintenance scheme.
	Amendment No. 14 would mean that the repeal of Section 6 and Section 46 of the Child Support Act 1991 would only have permanent effect if, three years from commencement, the Secretary of State demonstrated in a report to Parliament that the new arrangements for child maintenance were successful. The measure of success would be whether more parents with care on benefit were receiving child maintenance, and whether the average amount of maintenance pay had increased. I sympathise with the noble Lord's view that we should monitor the effect of the changes in the approach to child maintenance, and we will do so. There is already a requirement on the commission to report annually on how it is meeting its strategic objectives, its current performance against objectives and targets, and how efficiently and effectively it is exercising its different functions. We have discussed that.
	My noble friend Lady Hollis expressed the concern that the information and support service will be squeezed out in due course and that the commission will look to reduce its caseload. This will be very much directed by the targets and framework that the sponsoring department, the DWP, puts in place. It is up to us to make sure that, if that were in the mind of the commission, it does not, and is not allowed to do it. That is clearly the intent. To go further than this, as the proposed amendment suggests, fails to recognise that it takes time to implement such fundamental change for child maintenance, and for the full extent of the benefits to be realised and recognised. We have set out a staged plan for the implementation of the changes within the Bill, which we believe will cumulatively deliver significant benefits for parents and children, but these changes are not due to be fully concluded until 2013. Indeed, the new basis of assessment will not operate until 2010, so to set a decision point within three years of the first change would be to create an artificial assessment. The full range of change planned would not have had time to be implemented and bed in, nor would the benefits have been able fully to feed through.
	I believe that the amendment springs from concern that some parents may feel pushed and pressurised into agreeing voluntary arrangements whereas, in fact, they might be better off staying in the statutory scheme; or that if people leave the statutory maintenance scheme we will have no way of knowing what has happened to them or whether an effective arrangement is in place. We take the view that those concerns, although understandable, are unfounded. The commission's objectives are drafted in a manner that requires it to maximise effective arrangements for all children who live apart from one or both of their parents. If we accepted the amendment, movement to the new system might be further delayed, as we could not be clear what system parents would be moving into.
	All parents, regardless of their benefit status, should have the option, supported by the commission where necessary, to decide what are the best maintenance arrangements for them, and, most importantly, their children. Forcing them back into the statutory maintenance system would take that choice away from them.
	Amendment No. 13 proposes that Clause 15 be removed altogether. I suspect that this amendment is to enable any further discussion that noble Lords may want to have on the subject, but removing Clause 15 would prevent the repeal of Sections 6 and 46, and leave parents with care on benefit with no real choice as to how they arrange maintenance for their children. Providing parents with choice and promoting parental responsibility is a key part of the changes that we are making to the child maintenance system.
	We are moving to a child maintenance system that promotes greater parental responsibility, provides parents with more choice and enables and empowers them to make their own arrangements for child maintenance; and away from a system that was seen to exist to secure child maintenance as a means of recovering benefit expenditure.
	The noble Lord, Lord Skelmersdale, raised issues about the register of private agreements. The White Paper made clear that there were arguments both for and against a register and that the commission needed to take a view on whether to have one, with the concept of having a pilot. So we have not ruled it out; it is something on which we wish the commission to reflect.

Lord Skelmersdale: My Lords, does that mean that there is no need for legislation to create such a register? I think that this is an important point.

Lord McKenzie of Luton: My Lords, I do not believe that we would need primary legislation. I will have to check to see whether it will be done by secondary legislation—I am getting nods from the Box. I do not think that primary legislation is needed to secure it; that is the message that I am getting.
	I recap on the information and support service, which I know we have been through extensively, but is important. The existing system has only limited effect for the financially or personally vulnerable. The current system of compulsion targets only PWCs claiming income support or income-based jobseeker's allowance. For those on low incomes but working, there are no focused services; using the Child Support Agency is purely voluntary. Those who feel vulnerable but are not on benefit get little support and even when on benefits, of those who feel personally vulnerable—I understand the point made by my noble friend Lady Hollis—and who apply to the CSA, only 32 per cent of benefit-claiming PWCs receive maintenance. Basing an assessment of vulnerability on receipt of benefits is not a practical option. Being on benefits is not intended to be a fixed state—even more so with the Government's emphasis on helping parents into work.
	I hope that I have dealt with the points raised. I urge the noble Lord to withdraw the amendment because it would seriously impair the intent of the Bill and prevent something that I think that we all want to achieve.

Lord Kirkwood of Kirkhope: My Lords, I certainly do not want to impair the overall strategic approach of the Bill. I take from what the Minister said that, whether it comes through annual reports, departmental research, Office for National Statistics research or any other means, there will be some way of identifying—whether it is in three, five or 10 years' time—whether this is working or not. The Minister is nodding assent, which reassures me slightly. I want to be sure that this House will have a chance to monitor carefully the effects of this Bill.

Lord McKenzie of Luton: My Lords, to reassure the noble Lord, I think that it is vital that there is routine, robust reporting on performance, which has to include consideration of how many effective maintenance arrangements are in place and some analysis of their composition.
	While I am at the Dispatch Box, let me come back to the register of voluntary agreements and confirm the point that I made to the noble Lord, Lord Skelmersdale, in response to his point about the need for primary legislation. If the register is just a simple one, it does not need primary legislation. However, if it were then to go on to encompass issues about enforcement, clearly that would require changes to primary legislation.

Lord Kirkwood of Kirkhope: My Lords, that is helpful. Although these assurances are welcome, I still do not know how the Minister will get the information if these are voluntary agreements. If these new agreements are voluntary, I hope that CMEC or some successor body has some way of finding out about them.

Lord McKenzie of Luton: My Lords, I am sorry to interrupt the noble Lord again. We would get details and an understanding of voluntary agreements in part in the same way as we do at the moment, through the Family Resources Survey and other surveys or research that the commission would wish to undertake. That would be the basis of that database and of understanding what is going on.

Lord Kirkwood of Kirkhope: My Lords, I thank the Minister for his response. I think that we are all heading in the right direction. Some of us have more concerns than others, but that is often the way of it. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 14 not moved.]
	Schedule 4 [Changes to the calculation of maintenance]:

Lord Skelmersdale: moved Amendment No. 15:
	Schedule 4, page 71, line 38, leave out paragraph 6

Lord Skelmersdale: My Lords, I shall also speak to Amendments Nos. 16 and 17. The current formula for the payment of child maintenance provides for a reduction in child maintenance if the non-resident parent has overnight contact. The amount payable is decreased by one-seventh for one night a week, by two-sevenths for two nights a week, by three-sevenths for three nights and by half for four nights or more. For each night, therefore, that a child stays with a non-resident parent—worked out, incidentally, by an average over a 12-month period—child maintenance liability is reduced by one-seventh. In practice, this means that, unlike under the rules that applied in the family courts, there is a strong financial link between the amount of contact and the amount of maintenance paid. Having greater shared care means reduced child maintenance liability for the non-resident parent on the one hand and less child maintenance for the parent with care on the other. Predictably, this can lead to disputes over contact arrangements, particularly where there is already conflict and mistrust between parents.
	I seek in these amendments to ask the Minister whether he believes that the Bill addresses the real issue, because I do not think that it does. For me, the real issue is that these provisions encourage parents to associate the level of child maintenance payments with the amount of staying contact—for want of a better expression—that a child has with the other parent. The parents are placed in immediate financial conflict with each other, with the parent with care tempted to minimise overnight contact so as to maximise their maintenance payments and the non-resident parent seeking to maximise contact so as to minimise the child support maintenance payments. As such, there is a complete manipulation of what should be considered the natural contact arrangements between a parent and a child.
	I am told that contact applications at court are often less about what contact should or should not take place and more about the impact on either parent of child maintenance payment responsibilities. The courts have always strongly and quite rightly discouraged the association of child maintenance payments with contact. The present shared care provisions completely undermine this principle and encourage both mothers and fathers to connect these two issues. It is inconsistent to state that a parent's obligation to maintain a child is not dependent on whether they have contact and then to provide in legislation, as we are, a provision that encourages parents to limit the amount of the contact that a non-resident parent has with a child in order to maintain a certain level of financial support.
	It is the children who are caught in this financial conflict between their parents and often their future relationship with a parent is detrimentally affected due to the argument over child support payments, which the legislation so inextricably links to contact. The current and proposed shared care provisions allow the parents to be motivated by financial, not welfare, considerations, which is not conducive for the family unit—a dispersed family unit certainly, but still a family unit of a sort. This detrimental impact on the family and the child outweighs any so-called benefits provided to either the parent with care or to the non-resident parent and, unless there is significant shared care, it should not impact on maintenance payments.
	On this basis, I should like to hear the Minister's response to the suggestion of raising the shared care threshold, which would reduce the current financial conflict caused between the parents and children and allow the parents to deal with co-parenting without having to consider financial incentives for one or either parent. I beg to move.

Lord McKenzie of Luton: My Lords, I thank the noble Lord, Lord Skelmersdale, for moving this amendment, which gives us a chance to talk a little about shared care. I should say up front that I disagree with his analysis. We have always been clear about not linking contact with maintenance. It would be wrong to link those inextricably. Shared care arrangements do not do that. Notwithstanding the fact that there is no inextricable link, which is right, the opportunity to have some financial adjustment to recognise the cost that a non-resident parent might incur in having contact with their children is reasonable.
	The noble Lord's amendment is more to do with the new arrangements in the Bill for the administration of shared care decisions. Currently it is often difficult for agency staff to decide cases where care is shared because the level of care undertaken by the non-resident parent is disputed, or because evidence provided by the parents is of poor quality or conflicting. There are also many cases in which parents have only recently separated and have yet to decide on care arrangements for the children, so paragraphs 6 to 8 are intended to improve the administration of such cases. We know that as many as a fifth of cases on the 2003 scheme have an adjustment for shared care, so these issues affect a significant proportion of the case load. It is a significant issue.
	Paragraphs 6 and 7 are intended to allow the commission to look forward as well as backwards in deciding what shared care reduction will be appropriate. This means, for example, that if both parents agree about the level of shared care that is expected, the commission can easily make an assessment based on that agreement. This will usually be administratively more straightforward for the commission than the current position, which requires the agency to obtain and assess hard evidence about the level of shared care in the past period, which is often as long as a year.
	Paragraph 8 will provide regulations that allow the commission to make a maintenance calculation on the basis of an assumption as to the level of shared care. This will apply only when parents agree to share care but have not yet agreed on its frequency and there is no current or past pattern of care on which the decision can be based.
	The detailed rules will be set out in affirmative regulations, so there will be an opportunity for further debate on this subject and for the commission to consider them. However, our current intention is that the assumption will be that care is shared for an average of one night a week, which is the level required to prompt the lowest reduction in maintenance—a seventh. That is the most common level of reduction allowed for shared care and the assumption will remain in place for a period of up to six months. If, during or at the end of the six-month period, an agreement on the frequency of care has been reached, that will be used as the basis for an ongoing adjustment to the maintenance calculation. If no agreement has been reached at the end of the six-month period, evidence of shared care from that six-month period will be used.
	If Amendments Nos. 15 to 17 were accepted, the improvements provided by these provisions would be lost. It would also mean that recognition of shared care in certain cases could potentially be prevented until the first annual review of the case. We are fully aware that shared care is a contentious issue that attracts strong views. However, the consultation on the White Paper revealed no consensus among stakeholders for any change. Therefore, our current intention is that the shared care rules should remain largely unchanged. However, we will continue to examine the rules regarding cases of equal shared care and we wish to involve the commission in deciding the best way of proceeding.
	Perhaps I may emphasise to the noble Lord that we had a lot of discussion with stakeholders about what the appropriate approach to shared care should be. Some stakeholders who represented parents with care said that there should be no adjustment, whereas other parents said that there should be much more significant adjustments. In the end, we determined fundamentally just to carry forward the provisions that have broadly operated since 2003. Equal care will be kept under review, in particular, although I think that it is a small percentage of the total case load and it is quite possible that, in these cases, voluntary agreements are entered into in any event.
	These matters can be dealt with by regulation in due course, but the particular changes that we are making are administrative to make it easier to enter into shared care arrangements. The current broad arrangement for shared care is not unreasonable. Because there was no compelling evidence or submissions that took us in a different direction, that is where we ended up. However, I hang on to the point that I started with, which is that we do not wish to preserve in the Bill or as part of the arrangements the linking of maintenance and contact. Nevertheless, we need to recognise that contact involves costs and there should be a reasonable reflection of that. I hope that that will satisfy the noble Lord and he will feel able to withdraw the amendment.

Lord Skelmersdale: My Lords, clearly the Minister, his colleagues, the relevant section of the department and the CSA do not see this as a problem. However, he has not argued against my basic thought. It is inconsistent to state that a parent's obligation to maintain a child is not dependent on whether they have contact and then to produce a provision that encourages parents to limit the amount of contact a non-resident parent has with a child in order to maintain a certain level of financial support. There is a basic inconsistency. I should perhaps have said that this is a probing amendment; I take the chiding that he gave me earlier on the placing of an amendment in the Bill, but it was a hook on which to hang my thoughts and statements.
	There is a question that ought to be answered at some point. It is not appropriate to answer it today, but it would be helpful if the Minister could write me one of his compendious letters on the subject before the next stage of the Bill. Under the current regime, I understand that there is the one-night trigger point, which starts from the very beginning of the maintenance assessment. He said that, if agreement is subsequently achieved, the changes will be made in consultation with the stakeholders. I think that I remember his words correctly, but he can check his notes. If that is so, there must be some record somewhere of how often that has been achieved. I would like to know the answer to that.

Lord McKenzie of Luton: My Lords, I did not mean to chide the noble Lord earlier; if it came across like that, I offer my apologies.
	A number of issues arise. We are carrying forward the one-seventh, two-seventh etc formula because it is the adjustment that would be made to maintenance arrangements. The administrative arrangements are about trying to determine whether we are talking about one, two or three nights a week. To date we have done that simply by looking back over what has happened in practice, generally over a period of a year, and sometimes over a more representative period. However, it is sometimes the subject of quite a lot of dispute, certainly when someone is close to the thresholds. The administrative arrangements seek to bypass some of those arguments at an early stage. The adoption of the one-seventh approach is our current thinking in circumstances where both parents agree that there is to be shared care but have not established a pattern or settled on what it will be. We want to reflect something in the assessment right from the start and the sensible way to achieve that is with the one-seventh calculation. It is the most common adjustment made when shared care is undertaken as part of an arrangement.
	On ongoing arrangements with stakeholders, as we have discussed, they have and will continue to have a wide range of views. There is an issue particularly about equal care and whether any adjustment should be made for it. That is something that the commission would particularly like to focus on at an early stage and keep under review, rather than some of the other issues around the formula.
	I hope that that has helped the noble Lord. I acknowledge that, if there are financial adjustments as a consequence of maintenance arrangements, they might drive behaviour one way or the other, but it could equally be argued that making some adjustments to maintenance in order to recognise part of the impact of costs will encourage non-resident parents, so it could cut both ways. I do not think that we have a huge amount of evidence, but I will write to the noble Lord. I do not think that these arrangements are particularly driving behaviours of any kind, although they are certainly drivers of disputes that arise at the margins of the threshold. We are trying to cut some of those down and possibly—this is part of the current thinking—to have fixed-term arrangements for shared care just as we have for the basic assessment. However, if it would help the noble Lord, I would be happy to try to encapsulate this in a note to him and, I hope, to clarify these points.

Lord Skelmersdale: My Lords, I am extremely grateful for the additional comments from the Minister. Of course I am going to withdraw the amendment, as I am sure he knows well, but, when he writes to me encapsulating in perhaps more considered English what he has just said, it would be extremely helpful if he could tell me what percentage of cases with shared care have actually been altered under the current arrangements with the CSA. That would be a useful piece of research. He may not be able to do it in the first instance and, indeed, the CSA may not currently have the figures, but I think that CMEC ought to gather them, because I see this as a problem. The noble Lord talks about problems "at the margins", but I think that they are much more than that; the problems are more likely to be at the centre.

Lord McKenzie of Luton: My Lords, I want to make sure that I understand the noble Lord. Would he like an analysis of how many times a shared care arrangement is in place and whether it is a one-seventh or two-sevenths arrangement, which is subsequently changed? I suspect that that would be a horrendous task, because part of the problem, as I have indicated, is that a lot of disputes arise over whether the one-night or two-night threshold has been reached and there are constant changes. Also, for the analysis to be helpful to the noble Lord, he needs to understand where the arrangement has changed and why. It may be that there is a genuine desire to have fuller shared care arrangements or—this is the point that I think the noble Lord is pursuing—this may be driven by someone trying to gain monetary advantage. I think that the analysis will be very difficult. I shall take the point away, but I suspect that on that part of the investigation I shall be unable to satisfy him in his request for information. However, we will see what we can do.

Lord Skelmersdale: My Lords, I am extremely grateful. The Minister is right that the purport of my request is to get such analysis as it is possible to produce. I accept, of course, that if such an analysis is produced it will not prove the Minister's or my argument 100 per cent either way, but at least it will be a guide and perhaps we could come back to this on a later occasion. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 16 and 17 not moved.]
	Clause 19 [Transfer of cases to new rules]:

Lord Kirkwood of Kirkhope: moved Amendment No. 18:
	Clause 19, page 9, line 2, at beginning insert "Subject to subsections (2) and (3),"

Lord Kirkwood of Kirkhope: My Lords, Amendments Nos. 18 and 19 stand in my name and that of my noble friend Lord Addington. They give the House a chance to look at a practical proposal to introduce the notion of a debt management plan for existing CSA cases.
	As noble Lords know, the purport of the Bill is that between 2010 and 2013 there will come a date for all parents with an existing child support case when liability for child maintenance under the existing assessment or calculation will end. On that date, depending on the choices they make, they will either move to the third child support scheme which we are proposing in the Bill, move to their own voluntary agreed arrangements or opt for a continuation of their current arrangements under the new cash transfer service. So much is known; so far, so good. This amendment simply seeks to use that important date when liability under the existing scheme ceases to require that both parents should receive a full and final statement from the commission showing the amount of any outstanding child maintenance liability, including amounts owed to the parent with care and to the Secretary of State. The amendment proposes that, alongside that full and final statement, the commission should in each case prepare a personal debt recovery and debt management plan in respect of any child maintenance arrears, which it should then proceed to apply.
	If the amendment were accepted it would allow the drafting of regulations that would in turn provide a warning for future debt recovery action which would be of use to non-resident parents. It would also give parents with care the confidence that they would have a clear timetable for the steps that the commission proposes to take to implement the recovery and debt management strategy adopted in each and every case and indeed the intervals when the commission will report to the parent with care on the outcome of those steps.
	I do not think it too severe to say that debt collection has not previously been a high priority in the Child Support Agency's list of things to do. The result is that debts have been allowed to build up over long periods. We know that because we had long discussions about it in Grand Committee. The Child Maintenance and Enforcement Commission will inherit about £3.7 billion in formal child support debt. However, we are realistic enough to recognise that only a proportion of that, some £1.5 billion, is regarded as effectively collectable.
	Between 2008 and 2010 the new commission will have had two years to get to grips with its new enforcement powers, which will be useful and we hope will produce a new regime that will be more effective at reducing and writing off debts in the circumstances that will obtain in future. So by 2010 the commission should be in a position to know what debts can or cannot realistically be recovered. At that point it should impart that information on a case-by-case basis to the parents with care. That will enable parents to know precisely where they stand and when their CSA liability ceases. Arguably, at that point, the commission owes it to parents with care to tell them exactly what they can realistically expect it to recover in future.
	I said earlier that the Child Support Agency's rate of debt collection was barely keeping pace with the rate at which new debts and arrears were accruing. It would help to understand some of the background to this amendment if the Minister could answer the following point, if not today then by note at some future date. I noticed a Parliamentary Question from Mr Danny Alexander, dated 19 February 2008, which said that at the end of November 2007 the Child Support Agency had 1,056,500 cases with remaining outstanding debt. An estimated 53 per cent of that total debt is due to the Secretary of State and 47 per cent to parents with care. On Report the Minister helpfully said that, at the last count, internal CSA figures show that arrears grew at about £10 million a month during 2007-08. If I am reading those figures right, that means that, given the £126 million collected in arrears during that same year that we know about, the CSA may just be beginning to eat into the historic debt mountain. If that is the case, it would be good to know that.
	The House will know that the operational improvement plan was set to collect £213 million in historic debt by 2009, £100 million of it via private debt collectors. That is probably an optimistic figure in retrospect, but it would be good to know, if not tonight then some time between now and Report, how the operational improvement plan was faring with regard to its target.
	The amendment is practical and does not involve any great principle. The Minister may say that it is all going to be done anyway, but having it in the Bill would give parents with care some confidence; it would certainly do that for me. We will listen with interest to what the Minister says in response. I beg to move.

Lord Skelmersdale: My Lords, some time between 2010 and 2013 there will come a date for all parents with an existing child support case when liability for child maintenance under an existing assessment or calculation will end. On that date, depending on the choices made, their case will either be transferred to the new third child support scheme, detailed in Schedule 4, or be moved to their own voluntarily agreed one, or they will have opted for a continuation of their current arrangements under a new cash transfer service. I suspect that the last of these three options will be the least chosen—in fact, I would be surprised if it were chosen at all—but obviously the Minister must give them that option in the legislation. That date will differ depending on when their particular case is dealt with by the commission.
	The Minister will recognise these words, taken from the three-year business plan of the Department for Work and Pensions for the period 2008-11:
	"The launch of the Commission will help to transform our system of child maintenance by enabling and encouraging more parents to reach their own child-maintenance arrangements".
	It is therefore important that the Bill contains no hidden administrative disincentives. Against a background where child maintenance arrears continue to grow at the rate of, I believe, £16 million a month, an enormous sum, the current Child Support Agency has made little headway in collecting accumulated child maintenance arrears, even with the improvement plan. With the transfer of existing cases to the new commission for maintenance and enforcement, we remain concerned that insufficient priority will be given to the recovery of the £1.5 billion of child support regarded by the agency itself as collectable. Hundreds of thousands of parents raising children on their own still need the maintenance they are owed. Hundreds of thousands of parents bringing up children alone are owed considerable sums of maintenance.
	The noble Lord, Lord Kirkwood, mentioned that under the improvement plan the agency has in the past year successfully increased its collection of arrears by £35 million, from £91 million to £126 million. The Minister may be able to update my figures, we shall see. However, this, alas, is not even keeping pace with debt growth. I suspect it was on that sort of basis that Amendment No. 19 states that on,
	"the date when ... liability under"
	the existing scheme "has ceased to accrue", both parents should receive a full and final statement from the commission showing,
	"the amount of child maintenance liability that remains outstanding",
	including amounts owed
	"to the Secretary of State and to the parent with care".
	Alongside that, the amendment proposes that the commission should,
	"prepare in respect of each case"
	a personal
	"debt recovery and debt management plan"
	for any child maintenance arrears, which it should then supply. I think that it is only reasonable to ask the Minister whether the arrangements currently in place are either appropriate or sufficient to collect debt. If they are not, then I think that the noble Lord, Lord Kirkwood, on this rare occasion, probably has the right approach.

Lord McKenzie of Luton: My Lords, I start by thanking the noble Lord, Lord Kirkwood, for this amendment and his interest in the transfer arrangements. The movement of cases will be one of the most significant challenges for the commission and it is important that this process is carried out efficiently and supports existing clients as much as possible. This amendment would mean that the commission would have to provide each parent with a statement at the point of transfer and each statement would have a breakdown of any debt and who that was owed to. Any outstanding debt would then be subject to an arranged debt recovery plan.
	Although the Bill provides an outline of the process, it will be for the commission to develop the detailed plan that the Secretary of State will need to approve before the transfer process begins. In that plan, we will expect the commission to set out details of how existing clients will be supported through the process. As noble Lords may be aware, I have tabled an amendment to give Parliament the opportunity to debate the regulations in the first instance.
	To provide details in the Bill at this early stage in the process may restrict the commission and would not necessarily provide the best outcome for the parents and children concerned, although I would be surprised if the thrust of what the noble Lord proposes should not be encompassed within that. At the time of the transfer to new arrangements, which will undoubtedly be a busy time, the commission will know best how it wants to deploy its resources to meet client needs. Therefore, I suggest that it would not be prudent to commit the commission to such detail at this stage.
	I shall try now to deal with the questions raised by noble Lords. The agency's debt is now the cumulative total of its 15 years of operation, and since 100 per cent compliance is impossible to achieve, arrears will continue to accrue. The agency's efforts are therefore aimed at slowing the rate of growth of debt. The agency has been successful at reducing the rate of growth from around £20 million per month during 2005-06 to around £16 million per month during 2006-07. I think that those are the figures I gave last week. Other agency figures show that it has decreased again to around £10 million per month during 2007-08. On that basis it would be £120 million during the course of a year, which is less than the arrears that are being collected. So I think that the noble Lord's proposition would be right; there is some eating into the backlog.
	The noble Lord, Lord Skelmersdale, asked whether the arrangements in place for collecting debt were appropriate. Clearly, there is a challenging legacy. Part of that debt comes from interim maintenance assessments, which in a sense are assessments that are not necessarily based on fact but were made at the time when further details were not forthcoming from the non-resident parent. All of those will have to be sorted out, with discussions and negotiations around them, which is why we have some of the provisions in the Bill. We also have in the Bill extensive compliance powers and the ability to collect on a more rigorous basis than we have in the past. We will be debating one of those powers in the next group of amendments. I believe that that suite of arrangements is appropriate but it will be a significant challenge. As for the priority given to it, that will be very much up to the framework and targets imposed on the commission by the sponsoring department and the Secretary of State. I know that there has been concern that rigour will not be applied to collecting old arrears of debt, but that is certainly not the intent. We need to ensure that that is not the outcome.
	I hope that that has helped noble Lords and that the noble Lord, Lord Kirkwood, will be able to withdraw the amendment. There will be a chance to look in detail at the transfer arrangements under affirmative regulations closer to the time once the commission has developed its plans in some detail.

Lord Kirkwood of Kirkhope: My Lords, I am as ever grateful to the Minister, who is trying to be as helpful as he can. The amendment was drawn in terms of the basic essential requirements that any parent with care could expect in the situation that they will find themselves in after 2010. Anything less than that would be contrary to natural justice. I am absolutely certain that the new commission is not looking for things to do. I am trying to make things as easy for it as possible. But there are some basic requirements. The Minister said that these kinds of services, positions and statements will be carefully considered and arranged between the Secretary of State of the day and the commission at the time. I hope the House is saying to the Minister that any less than that would be inadequate. However, he has given me some reassurance which I am prepared to take at face value. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 19 not moved.]
	Clause 27 [Disqualification for holding or obtaining travel authorisation]:
	[Amendment No. 20 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendment No. 20A:
	Clause 27, page 22, line 7, leave out "make" and insert "apply to the court for"

Lord McKenzie of Luton: My Lords, I shall also speak to the other amendments in this group. These government amendments—which I am pleased to see also have the name of the noble Lord, Lord Skelmersdale, attached to them—move the jurisdiction for making a disqualification from holding or obtaining a travel authorisation order from the commission to the magistrates' court, in England and Wales, and the sheriff, in Scotland.
	We discussed this issue in Committee, when the noble Lord, Lord Goodlad, who I see is in his place, raised an amendment. I appreciate that the Committee posed legitimate questions in terms of the importance to the individual of holding a passport and the fact that such decisions are usually made by judicial determination. However, I was struck by the similarities rather than the differences in our positions. There seems to be wide agreement that the surrender of a passport, or in some cases the travel element of an ID card, would be a useful tool to gain compliance from some non-resident parents. That is our key objective, as it will contribute to reducing child poverty and ensuring that parents support their children.
	I therefore acknowledge your Lordships' concerns relating to that provision and accept that the prevailing view at present is that the decision should be made by the courts. Having listened to noble Lords' concerns I am content to introduce these amendments, which will mean that the commission has to apply to the court in order to disqualify the non-resident parent for holding or obtaining a travel authorisation, rather than being able to take the action administratively.
	However, I hope that we can all continue generally to reflect on which decisions need to be made by the courts and which could be made more effectively administratively. To that end, I reserve the right to come back to the House in some future legislation to look again at this decision. I beg to move.

Lord Skelmersdale: My Lords, it may surprise some of your Lordships that my name is attached to this vast raft of government amendments in the name of the noble Lord, Lord McKenzie. Supporting government amendments is not something in which I am particularly practised, even after all these years, but in this case I am delighted that the Minister has had the good sense to see that such measures are essential if the Bill is to represent sound practice, which is what we all want.
	The amendments revise the provision in the Bill that provides for CMEC administratively to disqualify a non-resident parent from holding or obtaining a travel authorisation should that person wilfully refuse, or culpably neglect, to pay child maintenance. This is an aspect of the Bill that these Benches, both here and in the other place, have strongly opposed from the start. I commend the Minister for listening not only to the Opposition but to the learned ruling of your Lordships' Select Committee on the Constitution, chaired by my noble friend Lord Goodlad, who championed a series of amendments to this effect throughout the Bill's passage.
	I supported my noble friend in Grand Committee not because I disagree with the Minister that the disqualification of a non-resident parent from holding or obtaining travel authorisation is a powerful and, in some cases, needed tool to encourage compliance with payment of child maintenance; I believe that CMEC should be very tough on those who shirk their responsibilities. However, I considered it lunacy to give CMEC a power that is properly held only by the courts. The Bill may have contravened Section 1(1) of the Immigration Act 1971, which confers a right on British citizens to come and go from the United Kingdom,
	"without let or hindrance except such as may be ... lawfully imposed on any person",
	which I think I am right in saying are the words that appear in the back of a British—or, these days, EU—passport. However, I stand to be corrected. Whether that is the case or not, there was a dichotomy in the Bill that, while passports were to be removed by administrative action, CMEC would still have to go to the courts if it wished to remove the non-resident parent's passport.
	I am only too relieved that the Minister has seen good sense and I fully support this group of amendments, which make the sanction of the removal of driving licences and passports the ultimate responsibility of the courts. I may have been less than fulsome in my praise of the Minister when he moved Amendment No. 9 late on Wednesday night after a difficult day in your Lordships' House. The amendment was tabled in response to an amendment that I moved in Grand Committee—it was part of a large group of amendments—which concerned what should go in the annual report. He listened to what I said, agreed with it and acted on it. He has done the same today, for which I am extremely grateful.

Lord Goodlad: My Lords, I thank the Minister for taking the trouble to re-examine the policy on this point. Your Lordships' Select Committee on the Constitution deliberated carefully about the matter. As we discussed in Grand Committee, we were not convinced that the Bill's policy, which we strongly support, of having an administrative decision followed by a right of appeal with suspensory effect would meet the policy goal of avoiding a drawn-out court process, as opposed to a straightforward power for CMEC to seek an order from a magistrates' court. The amendments to which the Minister spoke today seek to reflect what we recommended. I note that he reserves the right to come back with future legislation and, of course, no Parliament can bind its successors. We will scrutinise any proposals that come forward pursuant to that intention with the same rigour but, in the mean time, I am extremely grateful and support the amendment.

Lord Addington: My Lords, I join in the chorus of praise for these amendments. The alliance of the noble Lords, Lord McKenzie and Lord Skelmersdale, on the Marshalled List made me feel that I should oppose the amendments as a matter of principle, but I shall not do so. The courts should deal with this matter. It was a step too far for the commission and I am glad that the Government listened to everybody who said that that was the case. These amendments are the way forward. We can all agree on the general objective and, if we can agree on the means, we may well avoid some of the pitfalls that have occurred in this area.

Lord McKenzie of Luton: My Lords, I thank all three noble Lords who have spoken. Experience in the US and, I think, Australia, indicates that administrative processes can be effective. However, we have listened to advice. We are a listening Government.

Lord Skelmersdale: My Lords, with the leave of the House, the noble Lord really cannot get away with that. When I got up this morning I did not notice that I was living in either the United States or the Commonwealth of Australia, where conditions are considerably different from those here.

Lord McKenzie of Luton: My Lords, it is not appropriate to open that debate at this juncture. However, in large parts of the Bill, we have tried to draw on experience and best practice in other countries. Nevertheless, I shall not revisit the debate. We have ended up with unanimity. As I say, we are a listening Government and I am grateful for the support of all noble Lords.

On Question, amendment agreed to.

Lord McKenzie of Luton: moved Amendment No. 20B:
	Clause 27, page 22, leave out lines 23 to 25 and insert—
	"(4A) On an application under subsection (1) for an order against a person the court shall (in the presence of that person) inquire as to—
	(a) whether the person needs a travel authorisation to earn a living;(b) the person's means;(c) whether there has been wilful refusal or culpable neglect on the part of the person.
	(4B) If, but only if, the court is of the opinion that there has been wilful refusal or culpable neglect on the part of the person, it may make an order under this section.
	(4C) The court may not take action under both this section and section 40.
	(4D) On an application under subsection (1) the court shall not question—
	(a) the liability order by reference to which the Commission acted as mentioned in paragraph (a) of that subsection; or(b) the maintenance calculation by reference to which that liability order was made."
	On Question, amendment agreed to.
	[Amendment No. 21 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendment No. 21A:
	Clause 27, page 22, leave out lines 30 to 32 and insert—
	"(b) an amount (determined in accordance with regulations made by the Secretary of State) in respect of the costs of the application under this section."
	On Question, amendment agreed to.
	[Amendment No. 22 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 22A to 22C:
	Clause 27, page 22, leave out lines 33 to 35 and insert—
	"(6A) A court which makes an order under this section shall require the person to whom it relates to produce any travel authorisation that the person holds.
	(6B) The court shall send to the prescribed person any travel authorisation produced to the court under subsection (6A).
	(6C) Where a court—
	(a) makes an order under this section, or(b) allows an appeal against such an order,it shall send notice of that fact to the Commission; and the notice shall contain such particulars and be sent in such manner and to such address as the Commission may determine."
	Clause 27, page 22, line 40, at end insert—
	"( ) In this section (except for the purposes of subsection (6C)(b)) and in sections 39C to 39H, "court" means—
	(a) in relation to England and Wales, a magistrates' court;(b) in relation to Scotland, the sheriff."
	Clause 27, page 22, line 42, leave out from beginning to end of line 5 on page 23 and insert—
	"( ) Disqualification by an order under section 39B shall be for such period not exceeding two years as the court may specify in the order."
	On Question, amendments agreed to.
	[Amendments Nos. 23 to 25 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 25A to 25H:
	Clause 27, page 23, line 6, leave out "Commission" and insert "court"
	Clause 27, page 23, line 9, leave out "Commission" and insert "court"
	Clause 27, page 23, line 9, leave out "fit" and insert "just"
	Clause 27, page 23, line 10, leave out "Commission" and insert "court"
	Clause 27, page 23, line 12, leave out "Commission" and insert "court"
	Clause 27, page 23, line 12, leave out "fit" and insert "just"
	Clause 27, page 23, line 14, leave out "Commission" and insert "court"
	Clause 27, page 23, line 17, leave out "Commission" and insert "court"
	On Question, amendments agreed to.
	[Amendment No. 26 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 26A and 26B:
	Clause 27, page 23, line 19, leave out "order" and insert "application"
	Clause 27, page 23, line 22, leave out from beginning to end of line 23 on page 25
	On Question, amendments agreed to.
	[Amendments Nos. 27 and 28 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 28A and 28B:
	Clause 27, page 25, line 25, leave out "an appeal under section 39E" and insert "making an order under section 39B"
	Clause 27, page 25, line 26, leave out "under section 39B was" and insert "is"
	On Question, amendments agreed to.
	[Amendment No. 29 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendment No. 29A:
	Clause 27, page 25, line 28, leave out from "of" to "the" in line 30
	On Question, amendment agreed to.
	[Amendment No. 30 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 30A and 30B:
	Clause 27, page 25, line 33, leave out "the person" and insert "a search under subsection (1)"
	Clause 27, page 25, line 35, leave out from beginning to end of line 11 on page 26
	On Question, amendments agreed to.
	[Amendments Nos. 31 to 34 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 34A to 34C:
	Clause 27, page 26, line 14, leave out "Commission" and insert "court"
	Clause 27, page 26, line 15, after first "by" insert "the Commission or"
	Clause 27, page 26, leave out lines 20 to 23
	On Question, amendments agreed to.
	[Amendments Nos. 35 and 36 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendments Nos. 36A to 36D:
	Clause 27, page 26, line 25, leave out "Commission" and insert "court"
	Clause 27, page 26, line 26, after first "by" insert "the Commission or"
	Clause 27, page 26, line 27, at end insert—
	"(4) The Commission may make representations to the court as to the amount which should be paid before it would be appropriate to make an order under subsection (1) revoking an order under section 39B, and the person against whom the order was made may reply to those representations.
	(5) The court may exercise the powers conferred on it by subsection (1) or (3) without the need for an application where money found on a search under section 39F(1) is applied towards payment of the amount specified in the order under section 39B.
	(6) Where a court makes an order under this section, it shall send notice of that fact to the Commission; and the notice shall contain such particulars and be sent in such manner and to such address as the Commission may determine."
	Clause 27, page 26, line 29, leave out from "regulations" to beginning of line 5 on page 27 and insert—
	"(a) make provision in relation to orders under section 39B corresponding to the provision that may be made under section 40(11);(b) make provision"
	On Question, amendments agreed to.
	[Amendments Nos. 37 to 41 had been withdrawn from the Marshalled List.]

Lord McKenzie of Luton: moved Amendment No. 41A:
	Clause 27, page 27, line 7, at end insert—
	"39IA Application of sections 39B and 39I to Scotland
	(1) In their application to Scotland, sections 39B and 39I have effect with the following modifications.
	(2) In section 39B(4C) for "section 40" substitute "section 40A".
	(3) For section 39I substitute—
	"39I Power to make supplementary provision
	In relation to orders under section 39B—
	(a) the Secretary of State may by regulations make provision—(i) for sections 39C to 39H to have effect with prescribed modifications in cases where a person against whom such an order has effect is outside the United Kingdom;(ii) that a statement in writing to the effect that wages of any amount have been paid to a person during any period, purporting to be signed by or on behalf of the person's employer, shall be sufficient evidence of the facts stated; and (b) the power of the Court of Session by Act of Sederunt to regulate the procedure and practice in civil proceedings in the sheriff court shall include power to make provision corresponding to that which may be made by virtue of section 40A(8).""
	On Question, amendment agreed to.
	Clause 28 [Curfew orders]:

Lord McKenzie of Luton: moved Amendment No. 41B:
	Clause 28, page 27, line 9, leave out "39I" and insert "39IA"
	On Question, amendment agreed to.
	Clause 29 [Commitment to prison]:

Lord Tunnicliffe: moved Amendment No. 42:
	Clause 29, page 33, line 33, leave out "liable person" and insert "person searched"

Lord Tunnicliffe: My Lords, I will also speak to the other amendments in this group. These are minor and technical amendments to ensure consistency between the provisions in relation to commitment to prison, curfew orders and disqualification from driving. On the hearing of an application for a committal, curfew or disqualification from driving order, the court may order the liable person to be searched. Any money found on that person may be used as payment towards the relevant amount of maintenance arrears. The amendments allow the excess to be returned to the "person searched" rather than, as currently drafted, the "liable person". This will, in effect, be the same person, but the amendments will ensure consistency with the curfew provisions. That will mean that in future courts will not try to read into the inconsistency something that is not there. On that basis, I urge noble Lords to agree to the amendment. I beg to move.

On Question, amendment agreed to.

Lord McKenzie of Luton: moved Amendment No. 42A:
	Clause 29, page 34, line 32, leave out "liable person" and insert "person searched"
	On Question, amendment agreed to.
	Clause 30 [Disqualification for driving]:

Lord McKenzie of Luton: moved Amendment No. 43:
	Clause 30, page 35, line 42, leave out "liable person" and insert "person searched"
	On Question, amendment agreed to.
	Clause 32 [Power to accept part payment of arrears in full and final satisfaction]:

Lord McKenzie of Luton: moved Amendment No. 44:
	Clause 32, page 36, line 29, leave out "may" and insert "must"

Lord McKenzie of Luton: My Lords, I shall also speak to the other government amendments in the group. The issue of person with care consent for negotiated settlements and sale of debt was raised in Grand Committee and in Committee in the other place. A related issue was raised by the Delegated Powers and Regulatory Reform Committee concerning person with care consent in relation to the sale of debt.
	To address those concerns, I have brought forward this amendment. It will put in the Bill the requirement that regulations must make provision for the circumstances where the consent of the person with care—or, in Scotland, the child who applied for the maintenance calculation—will need to be given before the commission can accept part payment of arrears in full and final settlement of any arrears that are owed to them.
	I have also brought forward a similar amendment in relation to Clause 34, "Transfer of arrears", which will also put in the Bill the requirement that regulations must make provision for the circumstances where the consent of the person with care—and, in Scotland, the child who has made an application in their own right—will need to be obtained before the commission can exercise its powers.
	This will mean that where all the arrears are owed to the person with care—or, in Scotland, the child—the commission may not negotiate a settlement or sell the arrears without their consent. It will also mean that, where some of the arrears can be retained by the commission and the amount that is offered in settlement or which is proposed to be transferred is less than the amount that is owed to the person with care—or the child in Scotland—their consent will be required before the commission can exercise its powers.
	The amendment also makes it clear that regulations made under Clause 34 may in particular provide that payments received by the commission under the transfer arrangements may be treated as if they were payments of child support maintenance. I trust that these changes will help to allay any concerns that noble Lords and others may have had on this issue. I beg to move.

Lord Skelmersdale: My Lords, as I am not a member of that committee, far be it from me to speak for it, but I am sure that it will be pleased—as is the whole House. The Minister has not seen fit to mess with its findings. I would say to any Minister—I hope that the noble Lord will pass this on and that the Whip is listening—that Ministers mess with the Select Committees of your Lordships' House at their peril. I am glad that, yet again, the Minister has seen good sense.

Lord McKenzie of Luton: My Lords, I thank the noble Lord for his comments.

On Question, amendment agreed to.

Lord McKenzie of Luton: moved Amendment No. 45:
	Clause 32, page 36, line 30, at end insert—
	"(3) The regulations must provide that unless one of the conditions in subsection (4) is satisfied the Commission may not exercise the power under subsection (1) without the appropriate consent.
	(4) The conditions are—
	(a) that the Commission would be entitled to retain the whole of the arrears under section 41(2) if it recovered them;(b) that the Commission would be entitled to retain part of the arrears under section 41(2) if it recovered them, and the part of the arrears that the Commission would not be entitled to retain is equal to or less than the payment accepted under subsection (1).
	(5) Unless the maintenance calculation was made under section 7, the appropriate consent is the written consent of the person with care with respect to whom the maintenance calculation was made.
	(6) If the maintenance calculation was made under section 7, the appropriate consent is—
	(a) the written consent of the child who made the application under section 7(1), and(b) if subsection (7) applies, the written consent of the person with care of that child.
	(7) This subsection applies if—
	(a) the maintenance calculation was made under section 7(2), or(b) the Secretary of State has made arrangements under section 7(3) on the application of the person with care.""
	On Question, amendment agreed to.
	Clause 34 [Transfer of arrears]:

Lord McKenzie of Luton: moved Amendments Nos. 46 and 47:
	Clause 34, page 37, line 15, at end insert—
	"(2A) Regulations under subsection (1) must provide that unless one of the conditions in subsection (2B) is satisfied the Commission may not enter into transfer arrangements in relation to arrears of child support maintenance without the appropriate consent.
	(2B) The conditions are—
	(a) that the Commission would be entitled to retain the whole of the arrears under section 41(2) if it recovered them;(b) that the Commission would be entitled to retain part of the arrears under section 41(2) if it recovered them, and the part of the arrears that the Commission would not be entitled to retain is equal to or less than the transfer payment.
	(2C) In subsection (2B)(b), "transfer payment" means—
	(a) the payment that the Commission would receive from the transferee on the arrangements taking effect, and(b) such other payments under the transfer arrangements as may be prescribed.
	(2D) Unless the maintenance calculation was made under section 7, the appropriate consent is the written consent of the person with care with respect to whom the maintenance calculation was made.
	(2E) If the maintenance calculation was made under section 7, the appropriate consent is—
	(a) the written consent of the child who made the application under section 7(1), and(b) if subsection (2F) applies, the written consent of the person with care of that child.
	(2F) This subsection applies if—
	(a) the maintenance calculation was made under section 7(2), or(b) the Secretary of State has made arrangements under section 7(3) on the application of the person with care."
	Clause 34, page 37, line 22, at end insert—
	"(d) provide that a payment made to the Commission under transfer arrangements may be treated for prescribed purposes as if it were a payment of child support maintenance."
	On Question, amendments agreed to.
	Clause 40 [Disclosure of information to credit reference agencies]:

Baroness Verma: moved Amendment No. 48A:
	Clause 40, leave out Clause 40

Baroness Verma: My Lords, this is a probing amendment to discover from the Minister more details about the disclosure of parents' information to credit agencies. The commission is given powers to supply qualifying information to a credit reference agency. Will the Minister say exactly what qualifying information this could be? Will he also give me an idea of a credit reference agency that may need such qualifying information?
	This clause makes me anxious that a parent's failure to pay their child maintenance payments will entail damage to their credit rating. Of course we must pursue those who do not stand up to their responsibilities in maintaining their child or children, but must we disable those who are struggling to pay on low, or perhaps absent, income? A poor credit rating creates a series of financial disadvantages. Those with a poor credit rating can find themselves able to get only high-interest loans. Their ability to get contracts for direct debit is hugely decreased and they are unable to get credit cards. It can be difficult to reverse such a credit judgment.
	Is this really the right way for CMEC to gather a financial handle on those who default on their payments? The proportion of non-resident parents who, once assessed to pay, do so has barely risen in the past year, despite this being a special focus of attention by the CSA during 2007-08. In March 2007, child maintenance was being paid in 65 per cent of cases. This had risen to 67 per cent by March 2008. That means that a third of non-resident parents with maintenance liability are still failing to pay anything at all. This is clearly unacceptable. Does the Minister not agree that, given such figures, to financially hound and wound the defaulting non-resident parent making future payments would not be a beneficial strategy? Will he assure me that the financial information of the parent is private and its only status as qualifying information is within the remit of child maintenance? I beg to move.

Lord Kirkwood of Kirkhope: My Lords, I listened carefully to the noble Baroness. If this is a probing amendment, it might be worth running with it. However, I have difficulty in supporting the concept that, when all other systems of pursuit have been exhausted, non-resident parents who can pay but will not pay should not be hit by every means known to man.
	I speak from my previous experience as a Member of the other House. The noble Baroness is right to be cautious about this. If we started using this kind of power as a first resort and in a casual way, her concerns would be absolutely fulfilled. She is right to raise these matters. However, when push comes to shove, there are some parents who make a point of giving the statutory maintenance authorities the runaround. In such circumstances, wasting their credit rating is a threat that is probably more appropriate and acute in making them see sense and shape up to their responsibilities than almost anything else—that and selling their houses.
	In the past, the CSA has been too slow in using some of the powers that have been available to it. The commission that we are setting up has more entrenched and deeper powers. That is right and proper. Although the concerns raised by the noble Baroness about misuse of this power may be well founded, I cannot for the life of me see that it is wrong. With some assurances that it will be reserved for really hard cases, where all other eventualities have been tried, I cannot see that it is wrong for people's credit ratings to be attacked positively if that is the only way of getting them to shape up to their financial responsibilities. I would encourage CMEC to do that, but only in circumstances where there are few other alternatives and all the other methods available to them have been exhausted.

Lord McKenzie of Luton: My Lords, the amendment would remove Clause 40 from the Bill and thereby prevent the Child Maintenance and Enforcement Commission disclosing information about non-resident parents to credit reference agencies. Clause 40 has not yet been the subject of debate within your Lordships' House or in the other place. To clarify, we intend that the commission should have the ability to disclose information about non-resident parents to credit reference agencies for the purpose of linking payments of child maintenance with ability to obtain credit. Where ability to obtain credit is affected—either favourably or adversely—this may result in a tangible impact on the non-resident parent's lifestyle and thereby create a powerful incentive to make child maintenance payments. We intend that the information will be shared with credit reference agencies by way of electronic data transfer. Any sharing of data will, of course, comply with the Data Protection Act 1998 and Cabinet Office guidelines, in particular the Manual of Protective Security.
	Disclosure may take place either where the non-resident parent gives his or her consent—presumably where it would have a favourable impact on the credit reference—or where a liability order is in force. Financial services companies considering applications for credit or other services will, after carrying out a credit check with a credit reference agency, have the opportunity to take the maintenance liability into account.
	In January, we published an evaluation which explored the value of child support information in predicting credit behaviour. The indications are that making child maintenance payment information available to financial services companies that are assessing a person's financial standing would mean that compliance with a child maintenance liability could lead to an improved overall credit rating. Conversely, non-compliance could have a negative impact on credit worthiness; so it should. Further research will be carried out prior to this provision being implemented. Subject to the results of that further research and consultation, disclosure of information about non-resident parents to credit reference agencies will be a significant addition to the commission's compliance and enforcement tools. It will provide non-resident parents with a real incentive to meet their maintenance liabilities.
	I acknowledge that the disclosure of information held by the public sector to outside bodies is a sensitive issue, and individuals have a right to expect that their information is processed fairly and accurately. I firmly believe that disclosure of information about non-resident parents to credit reference agencies is justified in this context.
	The noble Lord, Lord Kirkwood, asked whether, where the liability order is imposed, details about non-resident parents will be disclosed to credit reference agencies automatically. The answer is no. The commission would have to consider whether in any individual case the sharing of information is justified. In part, that goes to address the point made by the noble Baroness that in any case where the disclosure could not be so justified, the commission, as a public authority, would be under an obligation to exercise its discretion so as not to share the information.
	The noble Baroness, Lady Verma, asked about people being denied access to mainstream credit as a result of the policy and asked whether that would not effectively add to social exclusion. Payment of child maintenance is both a legal and moral obligation and the amount payable by each non-resident parent is based on his or her income. Individuals are responsible for managing their own finances and should ensure that they take payments of child maintenance into account when considering their day to day living expenses and any subsequent application for credit. The key point is that in securing child maintenance payments from the non-resident parent, the commission is guarding against future social exclusion by increasing the income of vulnerable children.
	Under current arrangements, where a liability order is in place, information is registered with Registry Trust, which is held electronically. The problem is that, as a practical matter, that has not been helpful to the credit reference agencies in helping to assess individuals' credit ratings, because it does not give sufficient information. That there has been something disclosed in some public way would not in itself be new when there is a liability order in place. As I said, it would only otherwise be disclosed if there was the consent of the non-resident parent to disclose it. I hope that has allayed the fears. We need to proceed cautiously with this and further research needs to be undertaken. We see it as quite a powerful additional tool in the armoury of enforcement that the commission will need.

Baroness Verma: My Lords, I thank the Minister. Of course the noble Lord, Lord Kirkwood, is right that all efforts must take place to make the non-resident parent pay. I began by saying that it was a probing amendment, and I thank the Minister for his response. I feel better assured that the information will be shared only when it is justified and under very strict conditions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 44 [Use of information]:

Baroness Verma: moved Amendment No. 48B:
	Clause 44, leave out Clause 44

Baroness Verma: My Lords, again, the amendments in this group are probing amendments to ask the Minister for assurances that parents paying child maintenance will not have their right to individual data protection violated.
	Clause 44 brings Schedule 6 into effect. The Explanatory Notes on Schedule 6 tell us that paragraph 1 stipulates that information held in relation to child support functions will,
	"be used or disclosed to any person providing services to the commission for purposes relating to child support functions".
	I should like to hear from the Minister how far that disclosure of information will extend. How wide a remit will we give to the execution of these powers, and exactly where will the cut-off point be for purposes relating to child support functions? Will there be a cut-off point?
	Can the Minister give assurances that when information is shared on IT systems it can be used for the purposes of functions relating to child support and only for that purpose? Only persons who have been properly trained should be able to use the IT systems, and only when it is necessary for them to do so. Will the Minister assure me beyond all reasonable doubt that CMEC will do all in its power to protect each individual parent's personal data? I beg to move.

Lord Kirkwood of Kirkhope: My Lords, again, in a similar mode, I listened to the careful way in which the noble Baroness, Lady Verma, moved the amendment. I absolutely concur with the route that she is taking. Taking out Schedule 6 is a pretty blunt instrument, because it would mean that we could not even share data with HMRC, which is not particularly sensible. The mood in which the noble Baroness introduced the amendment was more of concern about how it is done and about some of the mechanics and safeguards that are necessary. She is quite right to be worried about that as recent child support details have gone awry and gone missing in rather grand form. I hope that the Minister can say whether the Government and the department have looked again at all their compliance and data protection requirements. To remove Schedule 6 would be a step too far.
	The noble Baroness is quite right and she reflects the view on all sides of the House that these sharing powers need to be handled with careful compliance rules and protocols, bearing in mind that the commission is not the department. As Members of Parliament we are able to have direct access to Ministers and hold them to account. That is not necessarily going to be the case in these new circumstances where these important bits of data and information containing the most personal details about some of our families throughout the United Kingdom will be handled in future by a Crown agency. That is a different situation. I reflect on, acknowledge and agree with the concerns raised by the noble Baroness. However, the amendment would be a step too far for me were it to be voted on in a Division and agreed to.

Lord McKenzie of Luton: My Lords, I thank the noble Baroness. I understand that this is a probing amendment and I hope that I can give her and the noble Lord, Lord Kirkwood, the assurances that they seek.
	Schedule 6 enables certain relevant information to be supplied to the commission by HMRC, the Department for Work and Pensions and the Northern Ireland department to enable the commission to carry out its functions relating to child support. That is a very important caveat. In turn, the commission is also able to supply information to those government departments to enable them to carry out certain specified functions for which they are responsible. Our plans to support information sharing between the commission, DWP and HMRC will improve administration of the child maintenance calculation regime, by providing the commission with easy access to relevant gross income data.
	The problems of the current system have been well documented. By not having to ask non-resident parents for income data in the majority of cases, and by being able to rely on already available income data as provided by HMRC, we will improve the efficiency of the assessment process and provide a better service to parents.
	Removing Clause 44 and Schedule 6 would mean that the commission would have to request income information from the non-resident parent. That would undermine the case for basing liabilities on gross weekly income. It would also carry the risk that current delays in calculating maintenance and getting money to children would be repeated in the future scheme. Obtaining income data from HMRC will also provide vital support to the proposed system of fixed-term awards, helping to ensure that maintenance calculations are kept accurate, up to date and easy to administer.
	We cannot overstate the necessity of a simple and efficient calculation system for the smooth running of the child maintenance service. We estimate that the commission will be able to obtain data for about 90 per cent of all non-resident parents by combining information available through the gateways. This includes the self-employed, who have proved particularly difficult to assess in the past. We are currently investigating the most effective way to transfer data. Although ultimately this will be a decision for the commission, we will start work as early as possible to ensure that the IT is efficient, functional and, above all, secure. The information the commission will receive will not be substantially different from the information currently used by the Child Support Agency to make maintenance calculations. The Data Protection Act 1998 will apply to this information, which will be processed in accordance with the Act.
	Section 50 of the Child Support Act 1991 will be extended. A person will be committing a criminal offence if they inappropriately disclose information obtained as a result of working for, or on behalf of, the commission. We will publicise the planned use of HMRC data so that non-resident parents, and parents with care, are fully aware that gross income data will be used to make maintenance calculations, and also provide parents with as much information as possible about their claim. We will build in safeguards to ensure that inappropriate or excessive information is not accessible by commission staff and to ensure that all persons with care, and non-resident parents, are aware of the appeals process operated by, and the legal obligations of, the commission.
	I hope that I have given the noble Baroness the assurances that she seeks. It is an important area that she has probed, but it is vital that we have these gateways to make a more effective commission.

Baroness Verma: My Lords, I thank the Minister for his response. The noble Lord, Lord Kirkwood, also raised some very important additional points to the probing amendment that I put forward.
	It is important that these data follow a stringent path through the commission and that they are encrypted. Past difficulties have shown how easy it has been to access data that were not properly guarded with encryption and with policies and procedures. Having been given those assurances by the Minister, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 6 [Use of information]:
	[Amendment No. 48C not moved.]
	Clause 53 [Regulations: Part 4]:

Lord McKenzie of Luton: moved Amendment No. 49:
	Clause 53, page 46, line 39, at end insert—
	"( ) No regulations may be made under any provision of section 47 if they are the first regulations to be made under that section, unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament."

Lord McKenzie of Luton: My Lords, I shall speak also to Amendments Nos. 50, 52, 53, 54, 55 and 56. These government amendments address concerns raised in Grand Committee and implement recommendations by the Delegated Powers and Regulatory Reform Committee. They also make certain technical adjustments. Amendments Nos. 49, 50 and 53 provide for regulation-making powers to be used in the first instance, subject to affirmative resolution. These amendments will ensure that the powers undergo a proper level of parliamentary scrutiny. The powers are those in Clause 53 relating to mesothelioma lump-sum payments. In Schedule 5, they relate to the movement of existing cases to new arrangements, which we have just discussed. Clause 28 makes provision for the commission to apply to the magistrates' court in England and Wales and the sheriff court in Scotland for a curfew order against a non-resident parent, where appropriate. Clause 41, which deals with piloting powers, will provide regulation-making powers to be used, subject to affirmative resolution. Amendments Nos. 52, 55 and 56 are technical in nature and I will not detain noble Lords with the details. I beg to move.

Lord Skelmersdale: My Lords, I say "ditto" to what I said to the previous block of government amendments.

On Question, amendment agreed to.
	Clause 55 [Regulations: general]:

Lord McKenzie of Luton: moved Amendment No. 50:
	Clause 55, page 48, line 31, leave out from beginning to "unless" in line 32 and insert "A statutory instrument containing—
	(a) regulations under section 6(1) or (4),(b) the first regulations under paragraphs 2(1), 3(1), 5(1) or (2), 6(1) or (3) or 7 of Schedule 5, or (c) an order under section 11(6),shall not be made"
	On Question, amendment agreed to.
	Schedule 7 [Minor and consequential amendments]:

Lord Skelmersdale: moved Amendment No. 51:
	Schedule 7, page 76, line 18, at end insert—
	"(1A) In section 4(10)(aa) (child support maintenance), for "one year" substitute "four years"."

Lord Skelmersdale: My Lords, it is very rare for a member of the Opposition to move an amendment to a schedule that is solely concerned with minor and consequential amendments. At first blush, it would seem that this is a technical amendment. However, it seeks to make a very important point. It replaces the phrase "one year" with "four years" in cases where a court order for maintenance and financial settlement following a divorce may be overturned by CMEC. Its purpose is to create consistency between the objectives of the commission and its likely operation in the light of the experience that we have had of the CSA.
	I will summarise the background to the amendment. CMEC's main objective will be to maximise the number of effective maintenance arrangements for children of parents who live apart. Subsidiary objectives include encouraging parents to make and keep voluntary arrangements for the support of their children. Perhaps it would be useful to point out that this subsidiary objective is a change from the original objective, which was to incorporate, stage by stage, all financial arrangements within the auspices of the Child Support Agency. This necessitates taking careful stock of the structures of the original Act. I contend that such retention from Section 4(10)(aa) of the Child Support Act 1991, in its current form, will undermine these objectives.
	The amendment seeks to close a loophole that is used by those who seek to reduce maintenance payments to children. Currently, parents may agree financial arrangements for children and have them made by court order. However, that obligation will end 14 months later if either parent wishes to take advantage of the "one-year rule" by making an application to the Child Support Agency. The solicitors' association group Resolution relayed a story that neatly summed up the disadvantage of what we might call, for convenience, "the 12-month rule". One of Resolution's lawyers recently acted on behalf of a wife. She was in part-time employment with a local bank. There were two young children. The husband ran a popular veterinary surgery in the local area. The parties had a good standard of living during their marriage. The husband met someone else and the marriage came to an end. The wife and husband negotiated a good settlement, largely between themselves, but also with assistance from legal representatives.
	One of the stumbling blocks was maintenance. The husband reinvested a lot of the profits back into the company, but also recognised that the wife needed money for the children. It was therefore agreed that he would pay a larger amount of child maintenance. They did the sums, using the 20 per cent net income figure, minus deductions for overnight stays, and the result was to agree a significantly higher figure than this. The husband also agreed to contribute to childcare costs. Had Resolution gone through the CSA or used its formula, the wife would not have been able to continue living where she was. She was made aware by Resolution lawyers that the husband could change his mind after 12 months, but she was still content. However, as predicted, after 12 months the husband is no longer sticking to the agreement. The wife has now met someone else and the husband fails to see why he should contribute to the household pot. The wife does not want to go through the Child Support Agency, having heard the horror stories. She therefore accepts a reduced amount that is causing her what was put to me as "no end of financial difficulties". This is the loophole of child maintenance arrangements that is exploited by paying parents who apply to terminate higher court awards and have them replaced with lower agency calculations. This is what I would like to put an end to through my amendment.
	Generally, agency decision-making proceeds slowly, particularly in complex cases, and there is likely to be a delay of many months, during which there is no obligation to pay at all, resulting in a hiatus of payments for the child. As such, the current system permits the unscrupulous to settle their court case on one level of obligation, knowing that after one year they can endeavour to surprise the other parent by a reduction in payment. That is patently contrary to the interests of the child and is at odds with government aspirations to reduce child poverty.
	The new system should seek to stop such behaviour and create safer, longer-term arrangements for the support of children. The current rules prevent parents making reliable settlements of other claims between themselves. When parents divorce, they may divide pensions, assets, contents of the home, maybe even the home itself, and they may make decisions about the occupation of the home or spousal, rather than child, maintenance. They do so usually by balancing ability to pay and need. To be able to do that, they must predict what award will be made by the CSA or, in due course, CMEC. Unfair settlements can result where one side opts to have a second bite of the cherry by relitigating support for the child through exploiting the one-year rule. Parents may reach agreement as to the level of payments that should be made. However, most parents will still want a binding obligation to pay. That can be offered by obtaining a confirmatory court order by agreement.
	Retention of the one-year rule undermines Parliament's objective for the new commission by making that arrangement vulnerable to termination after 12 months. Merely sanctioning compliance with the threat of an award by CMEC of an uncertain amount is inadequate. Further, it will increase the demands made upon CMEC, thus undermining the meeting of its objective of encouraging parents to reach their own agreements without recourse to the commission.
	My amendment recognises that circumstances change. Many families find that after four years it is time to reconsider whether the level of maintenance is appropriate. Families may then want to take advantage of the CMEC scheme if they are not otherwise able to reach agreement. My amendment has other significant benefits that I doubt the Minister can refute. By abolishing the 12-month rule, families are enabled to retain greater control of how they address their financial issues. That will reduce conflict on financial questions; conflict is the feature that is most likely to bring damage to children experiencing the separation of their parents.
	Another consequence is that the amendment will protect mediation agreements that otherwise risk being undermined by the CMEC jurisdiction. Lastly, the amendment will avoid the potential ping-pong of cases between the CSA and the court. Where the CSA assessment is followed by a court order, there is a risk that the CSA will return to request a review, following manipulation or a change in the formula's variables. Such a change will either undermine the intention of the court order or lead to a variation of the spousal maintenance order. I beg to move.

Lord Kirkwood of Kirkhope: My Lords, I acknowledge the service that the noble Lord, Lord Skelmersdale, has done by moving the amendment. It is a very serious and significant issue. I wish to make two points about it. I, too, have seen some of the cases produced by resolution and they are compelling. They make pretty dire reading in terms of their outcomes for the families that they affect. Therefore, I absolutely agree that we need to think this through carefully.
	However, a long time ago I was a consistorial solicitor in a family practice in Roxburghshire. In my experience, there is a world of difference between the law that applies to families with assets and incomes on both sides and the arrangements that need to be made sensibly for people on income-support-based JSA. My worry is that if we agreed to the amendment as drafted, you would lock out for four years some of the parents on benefit who entered agreements. That is difficult to contemplate, because the new CMEC—fingers crossed—will, I hope, sort itself out and become an efficient child maintenance collection system, which people will have recourse to with confidence.
	The trouble is that you cannot pick and choose. You cannot amend the law to depend on the current net value and worth of the members of the household to whom it applies. Therefore, you have to be careful about how you do this. I just wanted to enter that caveat. I absolutely understand the case that the noble Lord, Lord Skelmersdale, made, and I understand that according to evidence there have been dire results for the people affected. But over the piece I am more confident perhaps than I have been that the new commission will set a new benchmark and that the courts will operate a new system in the shadow of CMEC. That will become much more a default situation to which people will be able to respond. I hope that that will help some of the families to which the noble Lord rightly pointed.
	My real reason for getting to my feet on this amendment—and I acknowledge the fact that the noble Lord has ingeniously found a way of raising this important question on the schedule—is that there is still a feeling that there is a problem in Scotland, where there are peculiar court procedures, with Books of Council and Session and registered maintenance agreements that are enforceable at first instance, because they are registered in the Books of Council and Session. I know that the Minister and his advisers looked at this—some time ago, I suspect. I had hoped and assumed that the problem had been sorted, but I am told that civil practitioners in Scotland still face difficulties. They would certainly endorse the proposal by the noble Lord, Lord Skelmersdale, to move to a four-year period, because it would give them more scope and room for manoeuvre. I would feel a lot happier if the Minister or some of his advisers would talk to the appropriate committee members from the Law Society of Scotland, who are serious people. They are the professionals who, day after day, deal with the problems to which the noble Lord alluded.
	Arrangements that have bad effects on families last for a long time. My special plea to the Minister is that some last-minute conversations could perhaps be had with members of the Law Society of Scotland's expert committee on these matters to see whether there can be some ring-fencing of the arrangements made in the civil courts in Scotland. The last thing that we want is to have some mad nationalists running around saying that this mad Parliament in Westminster is interfering with our age-old, tried and tested systems of civil litigation in divorce and consistorial cases. That would serve none of our interests.
	My main point on this important amendment is to ask the Minister to look carefully again at this and perhaps agree to see representatives—or get some of his advisers to see representatives—who could argue the case regarding the peculiar circumstances of Scotland more adequately than me.

Lord McKenzie of Luton: My Lords, I thank the noble Lord, Lord Skelmersdale, for the amendment, which, as he said, seeks to extend the current period of 12 months during which parents with a court consent order for child maintenance may not apply to the commission for a maintenance calculation. The amendment would prevent those parents from applying for a period of four years. The existing 12-month rule applies when parents have a maintenance order or registered minute of agreement made on or after 3 March 2003. That rule has two main purposes.
	First, when agreement between parents breaks down it provides a swift and readily available route into the commission so that children are not left for considerable periods with either no maintenance or inadequate arrangements. Secondly, it encourages agreements that contain levels of child maintenance broadly consistent with the amount calculated under the statutory scheme and discourages agreements that divide property and assets between adults, leaving children without regular ongoing payments of child maintenance.
	I want to make it clear that the commission does not wish to intervene or disturb court orders that are working well. It is parents themselves who must decide whether or not their children's interests are best served by the provision of a consent order, or by a maintenance calculation made by the commission, or by some other route. We do not wish to restrict any effective and agreed maintenance arrangements, in whatever form, to a year, four years or to any other period of time.
	The 12-month rule cannot of itself act to set aside a court order and substitute a statutory maintenance calculation. Only the action of one or both parents can do that. Our hope is that parents with effective court orders will not need to turn to the commission for a calculation under the statutory scheme. The agreements will continue and benefit the children for so long as both parents want them to.
	During the progress of this Bill, Ministers have listened to a number of differing, detailed arguments on the 12-month rule, both here and in another place. Some amendments have been tabled which propose to remove the 12-month rule altogether; others to extend it to a longer period. The debate throughout has been constructive, but on the issue of extending the 12-month rule I remain unconvinced. Primarily, I am not persuaded because this issue has not been raised—as far as I am aware—by clients of the CSA themselves. Generally, when parents who use the CSA—or want to use the CSA—are unhappy about its delivery, Ministers, and indeed MPs, are quick to hear about it.
	I have recently been provided, by the good offices of the noble Lord, Lord Skelmersdale, and his colleagues in another place, with 15 items of correspondence from family lawyers—and I guess this is the correspondence shared with the noble Lord, Lord Kirkwood—giving examples of cases where they believe the 12-month rule may not have helped their clients. However, bearing in mind that some 20,000 consent orders are made each year, this is not a great body of evidence and we would need significantly fuller information before we overturn something that appears to be working well and in the best interests of children.
	We want to encourage agreed, effective maintenance arrangements which provide ongoing support for children. As long as parents are happy that their arrangements are providing adequate maintenance for their children, they can continue. We consider that a 12-month period strikes the balance between giving court orders a chance to bed in and providing a means to resolve difficulties quickly and keep payments flowing. If things do go wrong, parents need the choice of a readily available route into the commission. My opinion is that a period of four years is too long to deprive parents of that choice. Parents and children should not be left, for considerable periods, locked into the court system when maintenance may or may not be paid or maintenance arrangements for children may no longer be adequate or working. Parents should have the ability to resolve these issues, gain access to the commission and get payments flowing quickly.
	The noble Lord, Lord Skelmersdale, outlined an interesting example of what had happened. First, he assured us that the parties entering into that agreement were well aware of the 12-month rule and what the commission's arrangements would offer. I suppose the point is that if the non-resident parent wanted a lower level of maintenance to flow, it was always their right to enter the commission and get that from the calculation. I understand that some of the 15 cases that are presented to us are about information flows. We have amended the Bill to enable information provided in court to be shared and, I hope, have removed that impediment.
	The noble Lord, Lord Kirkwood, asked about arrangements in Scotland and issues that are seemingly still unresolved there. I am unsighted on that. Rather than try and scramble through my notes, I will talk to officials and perhaps we should discuss that further. It is not an issue, as far as I am aware, that seems to be raging and a major problem. If it is, these things often show themselves, particularly with legislation entering its final stages. The 12-month rule gives time for agreements to bed in and allows swift intervention by the commission to keep maintenance flowing to children, and therefore puts parents with court orders on the same footing as any other separated parents. On that basis—although I am sure he will not be entirely happy—I hope the noble Lord will withdraw his amendment

Lord Skelmersdale: My Lords, I will certainly withdraw my amendment but I do have to say to the noble Lord that I reserve the right to come back to this issue at the next stage of the Bill. Despite his conciliatory words, I am still extremely disturbed by the evidence that has been put to me, although I accept that it is not a vast body of evidence as the noble Lord said. I ask that the Minister takes up the suggestion of the noble Lord, Lord Kirkwood, but, please, do not confine the investigation to Scotland. This Bill covers England as well and the Law Society in England is just as reputable a body as the Law Society in Scotland.
	The noble Lord, in his objection to the case that I elucidated about the mother, left out a germane series of facts in his refutation of it. The reason the husband is no longer sticking to the agreement is, as I said, that the wife has now met someone else and the ex-husband fails to see why he should be contributing to the household pot. This would not happen under CMEC because he would be forced to continue to contribute to the pot.
	Of course, it is optional whether the wife, or the former wife, goes to CMEC. Because of the horror stories that she has heard about the CSA, the length of time it takes to operate, its success rate and all the rest of it—which I accept, with the improvement plan, is indeed improving—CMEC should—

Lord McKenzie of Luton: My Lords, does not the point that the noble Lord has made illustrate why we need the 12-month rule? I thought he said that because of circumstances, relationships had changed and the non-resident parent had decided he did not want to contribute any more. If he had to wait four years for the PWC to get access to the commission, it seems to me a very disagreeable outcome. I did not pick up the points about the efficiency of the commission, which we could debate endlessly. They will improve, given what is in this Bill. That ability, when circumstances change, for one party or the other to be able to go to the commission seems to me vital. The noble Lord has just illustrated that point.

Lord Skelmersdale: My Lords, the noble Lord pre-empted what I was about to say next with an argument of his own. There was a world before the CSA. In those days, the courts had the enforcement powers for the arrangements that they had sanctioned, originally—as they still are—made between lawyers working for both particular sides of this argument. There is no earthly reason why an inconvenienced parent should not go back to court for this operation, which I think is the answer to a point made by the noble Lord, Lord Kirkwood. I will continue to ponder on the amendment and I reserve the right to come back to it at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McKenzie of Luton: moved Amendments Nos. 52 to 54:
	Schedule 7, page 78, line 11, after ""court"" insert "(except for the purposes of subsection (8)(c))"
	Schedule 7, page 79, line 12, leave out "39D(3), 39E(3),"
	Schedule 7, page 79, line 12, after "39I," insert "39O(4),"
	Schedule 7, page 79, line 23, at end insert—
	"( ) After that subsection insert—
	"(2B) No statutory instrument containing (whether alone or with other provisions) regulations which by virtue of section 51A are to have effect for a limited period shall be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House of Parliament.""
	On Question, amendments agreed to.
	Schedule 8 [Repeals]:

Lord McKenzie of Luton: moved Amendment No. 55:
	Schedule 8, page 85, line 36, at end insert—
	
		
			 "Tribunals, Courts and Enforcement Act 2007 (c. 15) In Schedule 13, paragraphs 96 and 97." 
		
	
	On Question, amendment agreed to.
	Clause 59 [Transition]:

Lord McKenzie of Luton: moved Amendments Nos. 55A to 57:
	Clause 59, page 49, line 34, leave out "39E" and insert "39B"
	Clause 59, page 49, line 34, after "40," insert "40A,"
	Clause 59, page 49, line 37, leave out "39E"
	On Question, amendments agreed to.

Local Authorities (Alcohol Disorder Zones) Regulations 2008

Lord Bassam of Brighton: rose to move, That the draft regulations laid before the House on 1 April be approved.

Lord Bassam of Brighton: My Lords, in 2005-06, nearly one-fifth of all violent incidents were committed in or around pubs and clubs. Police and local authorities now have a wide range of devices and powers available to them to tackle alcohol-related crime and disorder. The key legislation is the Licensing Act 2003, which gives licensing authorities a wide range of powers to tackle alcohol-related crime, nuisance and disorder, including violent crime and underage sales, if they can be attributed to individual premises. These powers include the modification, suspension or revocation of licences on review.
	However, although a wide range of legal powers is available to the police and local authorities, it is not always possible to make a clear link between the crime and disorder happening in and around one or more licensed premises with the premises themselves. The alcohol-related crime and disorder in the public space may be the cumulative result of people drinking in a number of on-trade licensed premises or by purchasing alcohol in one or more off-licences when, for example, they are already intoxicated. In such cases, the provisions in the Licensing Act may be insufficient to ensure that these premises act in a collectively responsible manner. There will almost certainly be a need for additional enforcement activity. As such, as a measure of last resort, alcohol disorder zones have been designed to enable local authorities, in partnership with the police, to tackle high levels of alcohol-related crime and disorder within a defined zone by requiring licence holders in that zone to pay for additional police and local authority enforcement services. If licensed premises are part of the problem, we argue that it is only right that they should be part of the solution.
	To be fair, I am not saying that all licensed premises are part of the problem—far from it. Many trade very responsibly: they do not sell to kids; they do not sell to drunks; they do not have silly promotions that are designed to get people so drunk that they do not know what day of the week it is; and they ensure that at closing time dispersal is managed in a calm and efficient way, and that glasses are properly tidied up so that they do not become lethal weapons.
	However, we also know that this simply does not apply to all pubs, clubs, off-licences and supermarkets. Far too many sell to under-18s and to people who are already drunk. Far too many do not trade in a responsible way and, as a result of their "it's not my problem" approach, they collectively make the spaces in some towns and cities unpleasant places to be in the evenings and at night.
	We argue that, once all other options have been exhausted, alcohol disorder zones should be considered to ensure that licensed premises collectively behave in a responsible way. Critics of ADZs will say that they are unnecessarily bureaucratic, but they have been designed to ensure that licensed premises are given an opportunity to change before any charges are imposed on them.
	To ask a fair question, how will they work in practice? There are three key stages to an alcohol disorder zone: proposing to designate an area as an ADZ; the action plan stage; and, finally, the designation and operation of a full ADZ. If, following the proposal stage, where a local authority consults on whether to have an ADZ in the first place, the local authority decides to move ahead, it will then publish a voluntary action plan jointly with the police setting out the specified locality, such as a high street or town centre. The action plan will set out a combination of measures that should prevent alcohol-related crime and disorder taking place in that specified public space.
	The action plan will involve the local authority, police and licence holders by setting out what is to be expected from each of them. For example, the police may agree temporarily to put on additional police during the early hours and licensed premises will be expected to sign up to an approved accreditation or award scheme, such as "Best Bar None".
	Under the action plan, the affected licensed premises will be given a chance to make the necessary changes and, if they do, there may be no need for the local authority to take any further action. However, in cases where there has been insufficient implementation of the voluntary action plan on the part of licensed premises, the local authority may designate that locality as an ADZ. Designation allows local authorities to levy compulsory charges on certain licence holders for above-normal levels of enforcement activity by that authority and the police, such as frequent visits by police officers or police community support officers to licensed premises or additional activity by trading standards officers.
	I want to be absolutely clear that a local authority should consider designating a locality as an ADZ only after all other measures available to that authority, and to the police, to tackle high levels of alcohol-related nuisance or disorder have been tried and have failed to solve the problem. ADZs are not intended to be used like any other tool; they are very much a measure of last resort. In any event, the ADZ must be reviewed every three months to ensure that it is still required.
	It is not known at this stage exactly how many ADZs will be designated in the first year. The regulatory impact assessment estimates that 30 areas will start the ADZ process in the first year, but it could be that all or none move towards full designation. This will depend entirely on the success and take-up of the voluntary action plan.
	I now want to address some of the specific issues that have been raised in relation to ADZs. The first is the charging mechanism. The first step for the local authority in calculating charges that will apply to licensed premises is to work out the total cost of administering and enforcing an ADZ. This will be the total of the costs to the local authority of imposing, collecting and recovering charges, and reviewing the ADZ, plus the costs of additional policing and local authority services. Local authorities should aim to keep the costs of administering charges and reviewing ADZs as low as possible. We expect these costs to be recovered over the first three months of ADZ charges and for the level of charges to be reduced after this time.
	Having worked out the total cost of administering and enforcing the ADZ, the second stage in calculating charges is to spread the total cost of an ADZ among individual licence holders, who are not exempt, in accordance with Regulation 16. This is done by local authorities using the national ADZ charging formula that allows for local flexibility. The formula comprises two indicators: first, the premises' rateable value as a proxy for capacity; and, secondly, the hours of opening during the ADZ service period. All licensed premises will be scored against both indicators. The formula sets out that individual premises' total scores are calculated by either multiplying or adding together their scores under each of the two indicators. The local authority may give more or less weight to either of the two indicators. The total score that the premises receives will determine the charge that it has to pay. To make this as easy as possible for local authorities, the accompanying guidance gives a worked example to take them through it step by step.
	Some have asked whether supermarkets will be exempt from the charging mechanism. The short answer is no. If the availability of alcohol is one of the main reasons why people visit a supermarket during an ADZ service period, then it is right that it is liable to pay a charge.
	Although earlier versions of the regulations allowed for a 100 per cent discount, we were advised that this was ultra vires, as the Violent Crime Reduction Act 2006 does not allow for an exemption and a 100 per cent discount amounts to an exemption. As such, it was thought necessary to amend the regulations. However, when calculating the charge for premises that are open only for a short amount of time during the ADZ periods, it is possible that they will receive a large reduction in their charge. If premises are open for a short amount of time during the hours in which the ADZ period is operating, its score for hours of opening during the service period will be low. If a local authority multiplies the premises' rateable value score, whatever that may be, by this low score, the total score or charge to be paid will also be much lower than that of identical premises that are open throughout the ADZ service period. In this way, premises that are open only for a short time during the ADZ service period will pay a much lower charge.
	To conclude, as I have said, the alcohol disorder zones represent a solution to the current problem of it not being possible to get collective change from a number of licensed premises in any given location. They are designed as a measure of last resort. Even then, it is to be hoped that licensed premises will avoid incurring compulsory charges by choosing to comply with the voluntary action plan. Where they do not, it is right that a tougher approach should be taken, and that those responsible for contributing to crime and disorder pay for the services of those who have to deal with it. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 1 April be approved. [8th and 18th Reports from the Merits Committee and 17th Report from the Joint Committee on Statutory Instruments].—(Lord Bassam of Brighton.)

Baroness Miller of Chilthorne Domer: rose to move, as an amendment to the above Motion, at end to insert "but this House calls on Her Majesty's Government to withdraw the regulations and to re-lay them having taken account of the opinion of the Select Committee on the Merits of Statutory Instruments that 'the system will be unduly bureaucratic and without a clear idea of how ADZs will fit in with the other items in the local authorities' toolkit for combating alcohol-fuelled disorder.'"

Baroness Miller of Chilthorne Domer: My Lords, this House, in its wisdom, established a Merits Committee to look at the merits of statutory instruments. The Minister will be aware of what the Merits Committee has said in the case of these regulations. It has found them wanting, even given that they have been laid previously and withdrawn, and that this is at least the second time that they have been laid. Does the Minister not think that, when the Merits Committee, with all the legal experience of the noble and learned Lords who sit on it—not least the experience of the chairman, the noble Lord, Lord Filkin, who has long experience, as I know the Minister has, of local government—says that the regulations are unduly bureaucratic, and possibly therefore unworkable, that the Government should withdraw the regulations and think again? It does the Government no good to bring in regulations that bring them into disrepute in this way.
	Although I am going to address the substance of the regulations now, it is the comments of the Merits Committee that bear particular scrutiny. What is the point of your Lordships' House having a Merits Committee? It has come up with the strong comment that the ADZ system will be unduly bureaucratic and be,
	"without a clear idea of how it fits with the other items in local authorities' toolkit for combating alcohol- fuelled disorder".
	In other words, it is worse than useless. I do not know what the Merits Committee could say more strongly to make the Government rethink the regulations, which they have got wrong. I urge the Minister to exercise his ministerial discretion. I realise that civil servants have been asked to draw up the regulations and that it was in the Labour Party's manifesto that this would be done. Having made an effort to draw them up, they still have not come up with the goods. The Minister needs to bear that in mind and have another go at them. That is what I am asking him to consider this evening.
	Now I will address the substance of these regulations. We on these Benches would not dispute that there is a problem with alcohol-related disorder in town and city centres. Indeed, the British Crime Survey shows that alcohol was involved in 46 per cent of violent crime incidents. The Home Office's own figures show increases in violent crime between 3 am and 6 am since the introduction of the Licensing Act. Hospital A&E admissions have doubled since 1997 and A&E admissions of those aged under 18 for alcohol-related conditions have increased by more than 2,000 in the past 10 years. I will not go on quoting figures; there are enough there to show that there is a significant problem. We are certainly not disputing that.
	We also contend that local authorities and businesses have taken considerable steps forward. There are 62 business improvement districts around the country. That is very important. That is the community coming together. Those are businesses recognising their responsibilities to the social life of their area, and working with local authorities to improve it. I wonder how much discussion the Government had with them before drawing up these regulations. Then there are several local schemes, of which I am sure the Minister is aware, ranging from the Community Alcohol Partnership in St Neotts, Cambridgeshire, to one that I am aware of in Somerset, called Operation Joined-up. I discussed alcohol-related incidents with Councillor Mochnacz, the county councillor concerned with community safety issues. The one thing that he would have liked the Government to do is bring in a power to enable local authorities to require the use of shatterproof glass if it was thought necessary. That was echoed by the police, who were also at my meeting with Councillor Mochnacz. They said that the single thing that would reduce the bad effects of alcohol would be the introduction of either safety glass or a complete alternative to glass. That was a very positive suggestion, on which the Minister could act. I should be grateful for his comments on that.
	The ADZs have attracted criticism across the board, from industry, the police, the LGA, LACORS and, not least, as I mentioned, the Merits Committee itself. Why? Because if they are bureaucratic, it is unlikely that anyone will use them. As the Minister said, they are a tool of last resort, but if they are this bureaucratic, is it likely that local authorities will make such a rod for their own backs, and one that will take so much time? To give an example of where they are bureaucratic, the Minister quoted the charging mechanism. The charging mechanism assesses premises by rateable value and hours of opening during the service period. The Minister said that rateable value was a proxy for capacity. That is impossible to measure. A big pub, perhaps with bedrooms and serving suppers, would have a high rateable value as big premises, but the amount of alcohol consumed and the amount of disorder to come from that pub might be minimal, compared to a smaller, rather "shacky" type of nightclub, selling alcohol to kids already loaded up with vodka before they go in. It might be vodka purchased 20 miles away. I do not believe that this charging mechanism will be able to withstand all the appeals that will be brought as soon as the first ADZ is established.
	The Minister also made a comment about supermarkets. Noble Lords will understand that a supermarket will have a defence. Somebody will go in for 12 cans of Special Brew and one bottle of vodka, but, thinking about it, they also buy a pint of milk and a newspaper. They can claim, quite rightly, that they were going to have a coffee before they went out drinking, so it was the pint of milk that drew them into the supermarket. The supermarket can carry out a few surveys like that and quickly say that it should be exempt. There are all sorts of problems with the charging mechanism, as highlighted by everybody else who has been through these regulations.
	Then there is all the police time that will be taken up by this, when the community would rather that police officers were out on the beat, talking to youngsters and discouraging violent behaviour in the first place in that way, which we know a police presence can do. We do not feel that the charging system reflects the whole idea behind the zones. The Minister should also explain how they will be a proper differentiation between responsible and irresponsible premises, because if it is based on rateable value, it looks as if the regulations treat all premises in the same way.
	I know from talking to owners of wine bars, for example, that some are incredibly responsible and go to enormous lengths to ensure that their staff are trained not to serve alcohol to customers whom they feel are over the limit. In town centres where there is joined-up working, they have systems whereby they warn one another about groups of people going around who should be refused that evening because they are, it is felt, over the limit.
	The other option that the Government had was to ensure better enforcement of existing laws. There is an explanation of how ADZs will fit alongside other measures, but I bring the Minister back to the fact that the Merits Committee, having examined it, felt that it was not clear how they would fit with the other items in the local authorities' toolkit. I remind the Minister that the police already have sufficient powers covering all sorts of issues concerning alcohol and violence. They can even confiscate alcohol under a designated public places order, with a variety of punishments depending on the nature of the disorder: fines, temporary closure or review of the premises licence.
	As the Minister will know, responsibility comes back to the local authority as the licensing authority. This is my last point: the licensing authority—the local authority in its guise as a licensing authority—must take numerous issues into account. It does so responsibly with a lot of local input, but I believe that, under the regulations and the Licensing Act guidance, it is illegal for local authorities to promote a voluntary code or scheme against the practices that encourage binge drinking. Only the industry can commence such a scheme. I would like the Minister to say whether I am correct about that, as it seems surprising. Local authorities would like to have that power, which would tie in with their licensing authority powers.
	We believe that, although the effort being made through ADZs to control violence that comes from heavy drinking and alcohol-related abuse in town centres is worthy, the regulations fail, for all the reasons that I have given. I urge the Minister to withdraw the regulations and let his department have another go at them. I beg to move.
	Moved, as an amendment to the above Motion, at end to insert "but this House calls on Her Majesty's Government to withdraw the regulations and to re-lay them having taken account of the opinion of the Select Committee on the Merits of Statutory Instruments that 'the system will be unduly bureaucratic and without a clear idea of how ADZs will fit in with the other items in the local authorities' toolkit for combating alcohol-fuelled disorder.'" (HL Paper 100).—(Baroness Miller of Chilthorne Domer.)

Viscount Bridgeman: My Lords, I am grateful to the Minister for his comprehensive explanation, but the fact that his considerable powers of persuasion and analysis have been so tested with the whole question of charging is revealing in relation to the complications that the regulations present.
	None of us is under any illusion about the seriousness of the problem of alcohol-related disorder, but the history of the regulations, as the noble Baroness, Lady Miller, mentioned, has been a mess. The Merits Committee in its report makes some unusually trenchant criticisms. We welcome the Government's decision to reconsider the regulations, but we still feel that they have not gone far enough. The plans for the ADZs are still amiss and bear all the signs of not having been thought through properly. They are impractical and grossly complicated. The consultation period was too short. Serious reservations have been expressed by the Local Government Association and ACPO.
	Attention has been drawn by both speakers to the problems with the supermarkets. We remain deeply sceptical about the effectiveness of the provision. Those bodies are very well advised and I am extremely concerned that they may escape the full rigour of the ADZs.
	I urge the Government to think again. If we are unsuccessful, we shall watch the progress of the regulations carefully. My party remains committed to more control by local councils of licensing, more visible policing on the streets and a firmer approach to those who cause disorder having drunk to excess. I shall be interested to hear the Minister's reply.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Baroness and the noble Viscount, Lord Bridgeman, for their comments. The noble Baroness gave us a full flavour of her concerns. That is fair enough; it is why we have these debates. I know that there was a similarly robust response to the moving of the regulations in another place, and rightly so.
	We had a good debate on this when we passed the original legislation, which I quite enjoyed shepherding through the House. We then had a constructive engagement about ADZs, although I think that both parties opposite expressed some concerns. I am sure that I reflected at the time that we had to try to get the practicalities right.
	In fairness, the Merits Committee has, as it always does, done the House a service by highlighting some issues and concerns. We should be grateful to it for its comments, although noble Lords will gather from what I am about to say in response that we do not entirely agree with its conclusions.
	I ought to comment on the fact that the regulations were initially delayed and brought back after some drafting amendments. That was because there was some misdrafting and we wanted to get this absolutely right. In fairness, that raises the question whether we have the mechanism absolutely right. We think that we have, but if in the light of experience what is, after all, a new and groundbreaking policy is found to be wanting in some regards, we are flexible enough to come back to amend the regulations so that they work better. We do not anticipate that, but I say that because we have that degree of flexibility.
	On whether the regulations are unduly bureaucratic, in the terms of the Merits Committee report, the worry is understandable. It comes from the tiered approach that we have created, where you have first the proposition, then the action plan and then the full ADZ. In a sense, that approach is designed to remove bureaucracy, because if you do not need the action plan because remedial measures and steps have been taken by responsible businesses in the area, you do not have to proceed any further. If a local authority has an above-normal alcohol problem and sets out the steps that it plans to take, it is surely a good thing if those steps lead to a reduction in the problem without having to go to the full-blown ADZ process.
	The noble Baroness gave some examples of good practice around the country where local authorities and police forces have worked well together with partnerships to determine how to tackle local alcohol problems and what actions best work to resolve them. In many of these cases, the licensed trade takes positive steps to help to address the issues of concern. That is what we are asking local authorities to do. Police forces working with them in partnership will also be asked to do this. There should not, therefore, be any additional bureaucracy in that process.
	In the first instance, I think that only a few areas—perhaps half a dozen or so—will take up the full range of ADZ powers, having gone through the initial stages. That is because, as I have said several times, ADZs are a measure of last resort. The tools and powers available to the police will have worked, or the threat of an ADZ will have pushed those problem premises into taking action in their own self-interest. We will be more than happy to be flexible over these issues and we will probably want to report back to Parliament in 12 months or so on how the regulations work and on the operation of the ADZs.
	The noble Baroness referred to other elements of our toolkit. It is true to say that we have a wide-ranging kitbag at our disposal and local authorities are making good use of it. About 60 are already using different elements of the measures that are available in the Licensing Act 2003 and in other places to try to improve the management of premises and the general performance both of licensed premises and of localities.
	I take the point about business improvement districts having a potential impact. There is evidence that bids in city-centre areas can be useful in tackling issues such as this. However, one has to remember that a bid is an entirely voluntary process. The difference between a bid and the ADZ approach is that, if neither the voluntary approach nor the action plan has worked, there is a measure of last resort to force the issue and to make sure that measures are taken to tackle the problem. That is the big difference. Ultimately an ADZ can make licensed premises comply, whereas bids may be something the local authority considers as part of an action plan; they cannot be a substitute for making premises act in a collectively responsible manner.

Baroness Miller of Chilthorne Domer: My Lords, I am sorry to interrupt the Minister, but could he just clarify whether the local authority licensing committee has the power to do something about a licence when it is looking at renewing it?

Lord Bassam of Brighton: My Lords, that is absolutely right. However, as I am sure the noble Baroness understands better than most, our case is that it may not necessarily be one isolated premises that is the problem. It may be the accumulated effect of a supermarket off-sale, an off-sales premises itself, a club, a pub and perhaps even a restaurant—though I think that restaurants are the lower-order end of the problem—in a given area. I have in mind St James's Street in Brighton, which has all of those things. It occasionally has a problem with disorder which is related to the consumption of alcohol in that part of the city. You would be hard pressed to say which pub or club is the cause of the problem. The licensing authority has the flexibility to isolate a particular premises and to deal with it in a particular way. As the noble Baroness will readily admit, these powers can work well.
	I want to move to a few of the other points that the noble Baroness made. She made reference to shatter-proof glass and safety glass. It is sensible for pubs to have access to those and it may well be that a pub or club that has a particular problem makes use of them. It makes great sense. The noble Baroness's discussions with a Councillor Mochnacz alerted her to that particular issue. One would want to encourage best practice in licensed premises.
	I thought that the rateable value point was relevant but only in so far as we understand it as one part of the formula. We also have to understand that the local authority has some flexibility through the discounting scheme. That should enable the charges to be more finely tuned. We accept that the charging mechanism may at first instance be seen as complex but that reflects the way in which different areas work, the way they have different types of licensed premises and the way those premises might contribute in different ways to a larger problem.
	A charging mechanism that simply took the cost of enforcing and administering an ADZ and divided that amount by the number of licensed premises could disproportionately affect some premises, particularly restaurants, but not others, such as nightclubs. If the licensed premises with an ADZ were all the same type—pubs, for example—then a local authority might consider it sensible simply to divide the costs more evenly, in which case it would be very straightforward indeed. The key point is that, without the flexibility that we have included in the regulations, local authorities would not be able to make sensible decisions about what amounts to charge particular premises.
	We have a clear idea of how the ADZ benefits operate as a method of combating alcohol-fuelled disorder and we think that it is right to say that local authorities and the police have those powers to deal with alcohol-related problems. The Licensing Act 2003 is a key tool in the local authority's arsenal. If it is used well, it can reduce many of the problems associated with problem premises. However, the Act is about targeting specific premises. It does not allow local authorities to take action against premises when the problems occur in the public space between a number of licensed premises. It is that gap that the legislation aims to fill.
	There are avenues of complaint for licence holders who are concerned about the application of the charges. All local authorities have a formal system of redress for complainants and local authorities should incorporate provision for addressing licence holders' complaints about ADZs into those complaints procedures. There are also systems of appeal to the Local Government Ombudsman and to the Public Services Ombudsman in Wales should licence holders feel sufficiently aggrieved. They also have the facility to apply for judicial review.
	These measures are sensible and practical. I take the point that for some they may at first blush feel a bit unwieldy. When they are seen to work in practice, however, areas that have a problem with alcohol disorder on the streets caused by an accumulation of different sorts of licensed premises will see a longer term benefit.
	I have heard what the noble Lords have said this evening. We will keep this policy area under review. We would be foolish if we did not as we want to make these things work and work well for the communities that might be affected by them. For those reasons, I hope the House will support the regulations.

Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply. On a matter of detail, he did not tell me how he could empower councils to require premises to use shatter-proof glass and perhaps I will table a Question for Written Answer to enable him to do so.

Lord Bassam of Brighton: My Lords, I do have a response. If some areas wish to use shatter-proof glass in some licensed premises, we think they could consider using the powers in the Licensing Act 2003 to put a condition on that premises. That facility is available and I think that answers the noble Baronesses point.

Baroness Miller of Chilthorne Domer: My Lords, that is very helpful and I thank the Minister. On the broader point of the debate, I think this House will look very carefully, as it should, at the way the Government react to the reports of the Merits Committee on secondary legislation. The Minister will know that both opposition Benches have been very cautious about the amount of secondary legislation coming through. They are very nervous that more and more is being devised as secondary legislation by the Government. That is the very reason for the Merits Committee. When secondary legislation is not satisfactory—bearing in mind that we cannot amend it; we can only vote it through or not—it behoves the Government to take account of the comments of the very committee that we set up to look at this.
	Having said that, I am mindful of the Minister's offer to see how this is working and come back to us in 12 months. He can rest assured that we, too, will see how this works and very much look forward to it coming back in 12 months so that we can debate whether our fears have been realised and whether the LGA and ACPO between them could have devised something far more useful which the Government could pick up and use. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	On Question, Motion agreed to.
	House adjourned at 7.20 pm.